How Does Hays plc’s (LON:HAS) Earnings Growth Stack Up Against Industry Performance?
Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Hays plc’s (LSE:HAS) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for Hays
Did HAS’s recent earnings growth beat the long-term trend and the industry?
I prefer to 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 allows me to examine many different companies in a uniform manner using new information. For Hays, its most recent earnings (trailing twelve month) is UK£151.70M, which, relative to the previous year’s figure, has jumped up by 17.05%. Since these values may be somewhat short-term thinking, I have created an annualized five-year figure for HAS’s earnings, which stands at UK£97.89M This means that, on average, Hays has been able to gradually improve its earnings over the past few years as well.
What’s enabled this growth? Let’s take a look at if it is solely due to industry tailwinds, or if Hays has seen some company-specific growth. In the last couple of years, Hays increased its bottom line faster than revenue by successfully controlling its costs. This has caused a margin expansion and profitability over time. Looking at growth from a sector-level, the UK professional services industry has been growing, albeit, at a unexciting single-digit rate of 3.94% over the previous twelve months, and a substantial 11.95% over the previous five years. This means that any recent headwind the industry is enduring, Hays is relatively better-cushioned than its peers.
What does this mean?
Hays’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 Hays gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Hays to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for HAS’s future growth? Take a look at our free research report of analyst consensus for HAS’s outlook.
Financial Health: Is HAS’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.
