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How Does Craneware plc’s (LON:CRW) Earnings Growth Stack Up Against Industry Performance?

Vernon Smith

When Craneware plc (LON:CRW) announced its most recent earnings (30 June 2018), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Craneware 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 CRW has performed.

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Were CRW’s earnings stronger than its past performances and the industry?

CRW’s trailing twelve-month earnings (from 30 June 2018) of US$16m has jumped 17% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 14%, indicating the rate at which CRW is growing has accelerated. What’s enabled this growth? Let’s see whether it is solely owing to industry tailwinds, or if Craneware has seen some company-specific growth.

AIM:CRW Income Statement Export January 23rd 19

In terms of returns from investment, Craneware has invested its equity funds well leading to a 31% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 16% exceeds the GB Healthcare Services industry of 7.6%, indicating Craneware has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Craneware’s debt level, has increased over the past 3 years from 26% to 36%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Craneware gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Craneware to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for CRW’s future growth? Take a look at our free research report of analyst consensus for CRW’s outlook.
  2. Financial Health: Are CRW’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 30 June 2018. This may not be consistent with full year annual report figures.

To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.