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Does Hooker Furniture Corporation’s (HOFT) 63.2% EPS Growth Reflect The Long-Term Trend?

Brandon Murphy

Analyzing Hooker Furniture Corporation’s (NASDAQ:HOFT) 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 HOFT’s recent performance announced on 29 October 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for Hooker Furniture

Did HOFT’s recent EPS Growth beat the long-term trend and the industry?

I 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 method enables me to assess many different companies in a uniform manner using the latest information. Hooker Furniture’s most recent bottom-line is $30.6M, which compared to the previous year’s level, has risen by an impressive 66.67%. Since these values may be fairly nearsighted, I have created an annualized five-year value for HOFT’s net income, which stands at $12.3M. This suggests that, generally, Hooker Furniture has been able to gradually raise its earnings over the last few years as well.

NasdaqGS:HOFT Income Statement Dec 11th 17

What’s enabled this growth? Well, let’s take a look at if it is solely attributable to an industry uplift, or if Hooker Furniture has experienced some company-specific growth. In the last couple of years, Hooker Furniture expanded its bottom line faster than revenue by successfully controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the US household durables industry has been growing its average earnings by double-digit 10.14% in the previous twelve months, and 11.33% over the previous few years. This shows that any uplift the industry is enjoying, Hooker Furniture is capable of amplifying this to its advantage.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Hooker Furniture to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for HOFT’s future growth? Take a look at our free research report of analyst consensus for HOFT’s outlook.

2. Financial Health: Is HOFT’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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.