Did William Lyon Homes's (NYSE:WLH) Recent Earnings Growth Beat The Trend?
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When William Lyon Homes's (NYSE:WLH) announced its latest earnings (31 March 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were William Lyon Homes's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not WLH actually performed well. Below is a quick commentary on how I see WLH has performed.
See our latest analysis for William Lyon Homes
Could WLH beat the long-term trend and outperform its industry?
WLH's trailing twelve-month earnings (from 31 March 2019) of US$91m has jumped 38% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -9.1%, indicating the rate at which WLH is growing has accelerated. How has it been able to do this? Let's see if it is solely owing to an industry uplift, or if William Lyon Homes has experienced some company-specific growth.
In terms of returns from investment, William Lyon Homes has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. Furthermore, its return on assets (ROA) of 3.2% is below the US Consumer Durables industry of 7.1%, indicating William Lyon Homes's are utilized less efficiently. However, its return on capital (ROC), which also accounts for William Lyon Homes’s debt level, has increased over the past 3 years from 4.6% to 6.0%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While William Lyon Homes has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research William Lyon Homes to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for WLH’s future growth? Take a look at our free research report of analyst consensus for WLH’s outlook.
Financial Health: Are WLH’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 31 March 2019. This may not be consistent with full year annual report figures.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.
