What Does Investors Bancorp Inc’s (NASDAQ:ISBC) Past Performance Indicative Of Its Future?
Measuring Investors Bancorp Inc’s (NASDAQ:ISBC) track record of past performance is a valuable exercise for investors. It allows 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 ISBC’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. See our latest analysis for Investors Bancorp
Despite a decline, did ISBC underperform the long-term trend and the industry?
For the purpose of this commentary, I like to use data from the most recent 12 months, 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 allows me to assess different companies on a more comparable basis, using the most relevant data points. For Investors Bancorp, its latest earnings (trailing twelve month) is $184.0M, which, relative to the previous year’s level, has declined by -0.00055%. Since these values may be relatively myopic, I have estimated an annualized five-year value for Investors Bancorp’s earnings, which stands at $129.7M. This means that, on average, Investors Bancorp has been able to increase its earnings over the last few years.
How has it been able to do this? Let’s see whether it is solely attributable to industry tailwinds, or if Investors Bancorp has seen some company-specific growth. Over the last couple of years, Investors Bancorp increased its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the US banks industry has been growing, albeit, at a unexciting single-digit rate of 8.95% over the prior year, and 8.52% over the last five years. This means whatever uplift the industry is deriving benefit from, Investors Bancorp has not been able to realize the gains unlike its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies are profitable, but have unpredictable earnings, can have many factors affecting its business. I recommend you continue to research Investors Bancorp to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for ISBC’s future growth? Take a look at our free research report of analyst consensus for ISBC’s outlook.
2. Financial Health: Is ISBC’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 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.
