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Today I will take a look at Métropole Télévision S.A.'s (EPA:MMT) most recent earnings update (31 December 2018) and compare these latest figures against its performance over the past few years, as well as how the rest of the media industry performed. As an investor, I find it beneficial to assess MMT’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
Did MMT beat its long-term earnings growth trend and its industry?
MMT's trailing twelve-month earnings (from 31 December 2018) of €175m has increased by 7.8% 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 8.0%, indicating the rate at which MMT is growing has slowed down. To understand what's happening, let’s take a look at what’s going on with margins and whether the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Métropole Télévision has invested its equity funds well leading to a 24% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 12% exceeds the FR Media industry of 4.3%, indicating Métropole Télévision has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Métropole Télévision’s debt level, has declined over the past 3 years from 32% to 32%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 0.4% to 7.2% over the past 5 years.
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 Métropole Télévision to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MMT’s future growth? Take a look at our free research report of analyst consensus for MMT’s outlook.
- Financial Health: Are MMT’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 email@example.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.