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Does Koenig & Bauer AG’s (FRA:SKB) Past Performance Indicate A Weaker Future?

Examining Koenig & Bauer AG’s (FRA:SKB) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess SKB’s latest performance announced on 30 September 2018 and weigh these figures against its longer term trend and industry movements.

See our latest analysis for Koenig & Bauer

How Did SKB’s Recent Performance Stack Up Against Its Past?

SKB’s trailing twelve-month earnings (from 30 September 2018) of €72m has declined by -9.1% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 67%, indicating the rate at which SKB is growing has slowed down. Why is this? Well, let’s look at what’s going on with margins and if the entire industry is feeling the heat.

DB:SKB Income Statement Export December 10th 18

In terms of returns from investment, Koenig & Bauer has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 6.5% exceeds the DE Machinery industry of 5.7%, indicating Koenig & Bauer has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Koenig & Bauer’s debt level, has increased over the past 3 years from 1.5% to 11%.

What does this mean?

Though Koenig & Bauer’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors impacting its business. You should continue to research Koenig & Bauer to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for SKB’s future growth? Take a look at our free research report of analyst consensus for SKB’s outlook.
  2. Financial Health: Are SKB’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 2018. This may not be consistent with full year annual report figures.

To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.