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For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine TSR Inc’s (NASDAQ:TSRI) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. Check out our latest analysis for TSR
Could TSRI beat the long-term trend and outperform its industry?
I look at data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique enables me to assess many different companies on a similar basis, using new information. For TSR, its most recent earnings (trailing twelve month) is US$411.83K, which compared to last year’s level, has increased by a somewhat subdued 9.89%. Since these values are relatively short-term thinking, I’ve calculated an annualized five-year figure for TSRI’s earnings, which stands at US$75.57K This means generally, TSR has been able to steadily grow its bottom line over the last couple of years as well.
How has it been able to do this? Well, let’s take a look at whether it is only attributable to an industry uplift, or if TSR has experienced some company-specific growth. In the past couple of years, TSR expanded its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Inspecting growth from a sector-level, the US it industry has been growing its average earnings by double-digit 14.67% in the prior twelve months, and 11.46% over the previous five years. This shows that any uplift the industry is deriving benefit from, TSR has not been able to leverage it as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While TSR 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 TSR to get a more holistic view of the stock by looking at:
Financial Health: Is TSRI’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.
Valuation: What is TSRI worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether TSRI is currently mispriced by the market.
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 28 February 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.