Does Costain Group PLC’s (LON:COST) Past Performance Indicate A Stronger Future?
Analyzing Costain Group PLC’s (LSE:COST) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess COST’s recent performance announced on 31 December 2017 and compare these figures to its long-term trend and industry movements. See our latest analysis for Costain Group
How Well Did COST Perform?
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 method enables me to examine various companies in a uniform manner using new information. For Costain Group, its latest trailing-twelve-month earnings is UK£32.60M, which, against the previous year’s figure, has climbed up by 23.49%. Since these values may be somewhat short-term, I’ve estimated an annualized five-year value for COST’s net income, which stands at UK£21.90M This shows that, generally, Costain Group has been able to steadily grow its bottom line over the last few years as well.
What’s the driver of this growth? Well, let’s take a look at if it is solely owing to industry tailwinds, or if Costain Group has experienced some company-specific growth. The rise in earnings seems to be bolstered by a strong top-line increase outpacing its growth rate of expenses. Though this has led to a margin contraction, it has made Costain Group more profitable. Viewing growth from a sector-level, the UK construction industry has been growing its average earnings by double-digit 17.94% over the previous twelve months, and 19.28% over the previous five years. This means that any uplift the industry is gaining from, Costain Group is able to amplify this to its advantage.
What does this mean?
Costain Group’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Costain Group 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 Costain Group to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for COST’s future growth? Take a look at our free research report of analyst consensus for COST’s outlook.
Financial Health: Is COST’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 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.
