How Does ALJ Regional Holdings Inc’s (ALJJ) EPS Growth Stack Up Against Industry Performance?
Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess ALJ Regional Holdings Inc’s (NASDAQ:ALJJ) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for ALJ Regional Holdings
Did ALJJ beat its long-term earnings growth trend and its industry?
I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This enables me to assess various companies on a similar basis, using the latest information. For ALJ Regional Holdings, the latest twelve-month earnings is $11M, which, in comparison to the prior year’s figure, has moved up by 23.91%. Since these figures may be relatively nearsighted, I’ve calculated an annualized five-year figure for ALJ Regional Holdings’s net income, which stands at $6M. This means on average, ALJ Regional Holdings has been able to increasingly raise its net income over the last couple of years as well.
How has it been able to do this? Let’s take a look at whether it is only due to an industry uplift, or if ALJ Regional Holdings has experienced some company-specific growth. The hike in earnings seems to be driven by a solid top-line increase outpacing its growth rate of costs. Though this has led to a margin contraction, it has made ALJ Regional Holdings more profitable. Eyeballing growth from a sector-level, the US it services industry has been growing, albeit, at a subdued single-digit rate of 4.88% in the past year, and a substantial 10.52% over the past couple of years. This means whatever near-term headwind the industry is experiencing, the impact on ALJ Regional Holdings has been softer relative to its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While ALJ Regional Holdings 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 ALJ Regional Holdings to get a more holistic view of the stock by looking at:
1. Financial Health: Is ALJJ’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.
2. Valuation: What is ALJJ 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 ALJJ is currently mispriced by the market.
3. 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
