U.S. Markets closed

Does K12 Inc.'s (NYSE:LRN) Past Performance Indicate A Stronger Future?

Simply Wall St

Measuring K12 Inc.'s (NYSE:LRN) 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 LRN's recent performance announced on 30 June 2019 and compare these figures to its historical trend and industry movements.

View our latest analysis for K12

Could LRN beat the long-term trend and outperform its industry?

LRN's trailing twelve-month earnings (from 30 June 2019) of US$37m has jumped 35% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 17%, indicating the rate at which LRN is growing has accelerated. How has it been able to do this? Let's see whether it is solely owing to an industry uplift, or if K12 has seen some company-specific growth.

NYSE:LRN Income Statement, September 2nd 2019

In terms of returns from investment, K12 has fallen short of achieving a 20% return on equity (ROE), recording 5.9% instead. Furthermore, its return on assets (ROA) of 4.2% is below the US Consumer Services industry of 4.9%, indicating K12's are utilized less efficiently. However, its return on capital (ROC), which also accounts for K12’s debt level, has increased over the past 3 years from 3.6% to 6.9%.

What does this mean?

K12'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 K12 gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research K12 to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for LRN’s future growth? Take a look at our free research report of analyst consensus for LRN’s outlook.
  2. Financial Health: Are LRN’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 June 2019. 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.