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Measuring Bio-Techne Corporation's (NASDAQ:TECH) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess TECH's recent performance announced on 31 March 2019 and compare these figures to its historical trend and industry movements.
Did TECH beat its long-term earnings growth trend and its industry?
TECH's trailing twelve-month earnings (from 31 March 2019) of US$121m has increased by 8.3% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -0.2%, indicating the rate at which TECH is growing has accelerated. What's the driver of this growth? Let's take a look at whether it is merely a result of industry tailwinds, or if Bio-Techne has experienced some company-specific growth.
In terms of returns from investment, Bio-Techne has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 7.5% exceeds the US Life Sciences industry of 7.4%, indicating Bio-Techne has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Bio-Techne’s debt level, has declined over the past 3 years from 15% to 8.6%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 0.02% to 46% over the past 5 years.
What does this mean?
Bio-Techne's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Bio-Techne gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Bio-Techne to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for TECH’s future growth? Take a look at our free research report of analyst consensus for TECH’s outlook.
- Financial Health: Are TECH’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.
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 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. Thank you for reading.