Does Hypoport AG's (FRA:HYQ) Recent Track Record Look Strong?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
After reading Hypoport AG's (FRA:HYQ) latest earnings update (31 December 2018), I found it beneficial to look back at how the company has performed in the past and compare this against the most recent numbers. As a long-term investor I tend to pay attention to earnings trend, rather than a single number at one point in time. I also like to compare against an industry benchmark to understand whether HYQ has outperformed, or whether it is simply riding an industry wave. Below is a brief commentary on my key takeaways.
View our latest analysis for Hypoport
Could HYQ beat the long-term trend and outperform its industry?
HYQ's trailing twelve-month earnings (from 31 December 2018) of €22m has jumped 22% 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 28%, indicating the rate at which HYQ is growing has slowed down. What could be happening here? Well, let’s take a look at what’s occurring with margins and whether the whole industry is experiencing the hit as well.
In terms of returns from investment, Hypoport has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 7.6% exceeds the DE Diversified Financial industry of 6.8%, indicating Hypoport has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Hypoport’s debt level, has declined over the past 3 years from 31% to 12%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 50% to 52% over the past 5 years.
What does this mean?
Hypoport'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 Hypoport gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Hypoport to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for HYQ’s future growth? Take a look at our free research report of analyst consensus for HYQ’s outlook.
Financial Health: Are HYQ’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 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
