Does Calesco Spólka Akcyjna’s (WSE:CLS) Recent Track Record Look Strong?
In this article, I will take a look at Calesco Spólka Akcyjna’s (WSE:CLS) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, along with how the rest of CLS’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. View our latest analysis for Calesco Spólka Akcyjna
Commentary On CLS’s Past Performance
I use 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 blend enables me to examine many different companies in a uniform manner using the latest information. For Calesco Spólka Akcyjna, its most recent trailing-twelve-month earnings is ZŁ237.03K, which, in comparison to the previous year’s level, has increased by more than double. Given that these figures are somewhat short-term, I’ve calculated an annualized five-year value for CLS’s net income, which stands at ZŁ257.37K This means that, despite the fact that earnings increased from last year’s level, over the past couple of years, Calesco Spólka Akcyjna’s earnings have been falling on average.
What could be happening here? Let’s examine what’s transpiring with margins and if the rest of the industry is facing the same headwind. Over the past couple of years, revenue growth has been lagging behind which suggests that Calesco Spólka Akcyjna’s bottom line has been driven by unsustainable cost-cutting. Looking at growth from a sector-level, the PL commercial services industry has been growing its average earnings by double-digit 37.88% over the past twelve months, and a less exciting 9.32% over the past five years. This means any uplift the industry is benefiting from, Calesco Spólka Akcyjna is able to leverage this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth isn’t always indicative of a continued optimistic outlook. There may be variables that are affecting the industry as a whole, thus the high industry growth rate over the same time frame. I suggest you continue to research Calesco Spólka Akcyjna to get a more holistic view of the stock by looking at:
Financial Health: Is CLS’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 CLS 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 CLS 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 31 December 2017. 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.
