Measuring Grand Canyon Education, Inc.'s (NasdaqGS:LOPE) track record of past performance is a useful exercise for investors. It enables 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 LOPE's recent performance announced on 30 June 2019 and weigh these figures against its long-term trend and industry movements.
Did LOPE's recent earnings growth beat the long-term trend and the industry?
LOPE's trailing twelve-month earnings (from 30 June 2019) of US$234m has increased by 2.8% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 18%, indicating the rate at which LOPE is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s going on with margins and if the whole industry is feeling the heat.
In terms of returns from investment, Grand Canyon Education has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 11% exceeds the US Consumer Services industry of 4.8%, indicating Grand Canyon Education has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Grand Canyon Education’s debt level, has declined over the past 3 years from 29% to 16%.
What does this mean?
Grand Canyon Education's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Grand Canyon Education has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Grand Canyon Education to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for LOPE’s future growth? Take a look at our free research report of analyst consensus for LOPE’s outlook.
- Financial Health: Are LOPE’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 30 June 2019. This may not be consistent with full year annual report figures.
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