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How Does Grupa RECYKL SA.’s (WSE:GRC) Earnings Growth Stack Up Against Industry Performance?

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Seth Doty
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Assessing Grupa RECYKL SA.’s (WSE:GRC) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess GRC’s recent performance announced on 30 September 2017 and evaluate these figures to its longer term trend and industry movements. Check out our latest analysis for Grupa RECYKL

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

I like to use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This enables me to assess many different companies on a similar basis, using new information. For Grupa RECYKL, its latest earnings (trailing twelve month) is ZŁ4.06M, which compared to last year’s level, has jumped by a significant 69.80%. Since these figures are relatively short-term thinking, I have computed an annualized five-year value for GRC’s net income, which stands at ZŁ858.91K This shows that, generally, Grupa RECYKL has been able to increasingly improve its bottom line over the last couple of years as well.

WSE:GRC Income Statement May 28th 18
WSE:GRC Income Statement May 28th 18

What’s enabled this growth? Well, let’s take a look at if it is solely owing to an industry uplift, or if Grupa RECYKL has seen some company-specific growth. In the past few years, Grupa RECYKL grew its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Inspecting growth from a sector-level, the PL commercial services industry has been multiplying average earnings growth of 69.80% in the past twelve months, and a less exciting 9.10% over the previous five years.

What does this mean?

Grupa RECYKL’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 Grupa RECYKL gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Grupa RECYKL to get a better picture of the stock by looking at:

  1. Financial Health: Is GRC’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.

  2. Valuation: What is GRC 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 GRC is currently mispriced by the market.

  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 September 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.