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Measuring Science Group plc's (LON:SAG) 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 SAG's recent performance announced on 31 December 2018 and compare these figures to its historical trend and industry movements.
Commentary On SAG's Past Performance
SAG's trailing twelve-month earnings (from 31 December 2018) of UK£4.3m has jumped 42% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -1.4%, indicating the rate at which SAG is growing has accelerated. What's the driver of this growth? Let's take a look at whether it is only a result of industry tailwinds, or if Science Group has experienced some company-specific growth.
In terms of returns from investment, Science Group has fallen short of achieving a 20% return on equity (ROE), recording 10% instead. Furthermore, its return on assets (ROA) of 6.3% is below the GB Professional Services industry of 8.4%, indicating Science Group's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Science Group’s debt level, has declined over the past 3 years from 9.1% to 8.8%.
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? You should continue to research Science Group to get a better picture of the stock by looking at:
- Financial Health: Are SAG’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.
- Valuation: What is SAG worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SAG is currently mispriced by the market.
- 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 firstname.lastname@example.org. 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.