Investors with a long-term horizong may find it valuable to assess Systemair AB (publ)'s (STO:SYSR) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Systemair is currently performing.
Could SYSR beat the long-term trend and outperform its industry?
SYSR's trailing twelve-month earnings (from 30 April 2019) of kr322m has jumped 40% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -13%, indicating the rate at which SYSR is growing has accelerated. What's enabled this growth? Well, let’s take a look at if it is solely owing to industry tailwinds, or if Systemair has experienced some company-specific growth.
In terms of returns from investment, Systemair has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 5.2% is below the SE Building industry of 6.6%, indicating Systemair's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Systemair’s debt level, has declined over the past 3 years from 14% to 13%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 55% to 79% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Systemair gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Systemair to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SYSR’s future growth? Take a look at our free research report of analyst consensus for SYSR’s outlook.
- Financial Health: Are SYSR’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 30 April 2019. This may not be consistent with full year annual report figures.
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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.