Examining Premier Investments Limited's (ASX:PMV) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess PMV's latest performance announced on 27 July 2019 and compare these figures to its longer term trend and industry movements.
Were PMV's earnings stronger than its past performances and the industry?
PMV's trailing twelve-month earnings (from 27 July 2019) of AU$107m has jumped 27% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.2%, indicating the rate at which PMV is growing has accelerated. What's the driver of this growth? Well, let’s take a look at whether it is merely due to industry tailwinds, or if Premier Investments has experienced some company-specific growth.
In terms of returns from investment, Premier Investments has fallen short of achieving a 20% return on equity (ROE), recording 7.9% instead. Furthermore, its return on assets (ROA) of 6.5% is below the AU Specialty Retail industry of 8.2%, indicating Premier Investments's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Premier Investments’s debt level, has increased over the past 3 years from 8.8% to 10%.
What does this mean?
Premier Investments's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Premier Investments has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Premier Investments to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PMV’s future growth? Take a look at our free research report of analyst consensus for PMV’s outlook.
- Financial Health: Are PMV’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 27 July 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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