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Does Maxcom SA.’s (WSE:MXC) Recent Track Record Look Strong?

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Kevin Zeng
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When Maxcom SA.’s (WSE:MXC) announced its latest earnings (30 September 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Maxcom’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not MXC actually performed well. Below is a quick commentary on how I see MXC has performed. See our latest analysis for Maxcom

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

I like to use the ‘latest twelve-month’ data, 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 method enables me to assess various companies in a uniform manner using the most relevant data points. For Maxcom, its latest trailing-twelve-month earnings is ZŁ10.55M, which, in comparison to last year’s level, has grown by a fairly subdued 3.68%. Given that these values are somewhat nearsighted, I’ve computed an annualized five-year value for Maxcom’s earnings, which stands at ZŁ8.91M This suggests that, on average, Maxcom has been able to consistently improve its bottom line over the last couple of years as well.

WSE:MXC Income Statement Mar 20th 18
WSE:MXC Income Statement Mar 20th 18

What’s the driver of this growth? Well, let’s take a look at if it is merely attributable to industry tailwinds, or if Maxcom has experienced some company-specific growth. Over the past few years, Maxcom increased its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Scanning growth from a sector-level, the PL tech industry has been growing, albeit, at a unexciting single-digit rate of 6.61% over the previous twelve months, and 9.27% over the last five years. This suggests that any tailwind the industry is enjoying, Maxcom has not been able to gain as much as its average peer.

What does this mean?

Though Maxcom’s past data is helpful, it is only one aspect of my investment thesis. While Maxcom has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Maxcom to get a more holistic view of the stock by looking at:

  • 1. Financial Health: Is MXC’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.

  • 2. 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.