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Does Atrion Corporation's (NASDAQ:ATRI) Past Performance Indicate A Weaker Future?

Simply Wall St

When Atrion Corporation (NASDAQ:ATRI) announced its most recent earnings (31 December 2018), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Atrion performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see ATRI has performed.

See our latest analysis for Atrion

How Well Did ATRI Perform?

ATRI's trailing twelve-month earnings (from 31 December 2018) of US$34m has declined by -6.4% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 6.0%, indicating the rate at which ATRI is growing has slowed down. What could be happening here? Let's examine what's going on with margins and whether the whole industry is facing the same headwind.

NasdaqGS:ATRI Income Statement, April 19th 2019

In terms of returns from investment, Atrion has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 14% exceeds the US Medical Equipment industry of 6.9%, indicating Atrion has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Atrion’s debt level, has declined over the past 3 years from 27% to 19%.

What does this mean?

Though Atrion's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. You should continue to research Atrion to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for ATRI’s future growth? Take a look at our free research report of analyst consensus for ATRI’s outlook.
  2. Financial Health: Are ATRI’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.
  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 trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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.