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Does TSR Inc’s (NASDAQ:TSRI) Recent Track Record Look Strong?

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  • TSRI

For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on TSR Inc (NASDAQ:TSRI) useful as an attempt to give more color around how TSR is currently performing.

See our latest analysis for TSR

Did TSRI beat its long-term earnings growth trend and its industry?

TSRI’s trailing twelve-month earnings (from 31 August 2018) of US$383k has jumped 46% 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 50%, indicating the rate at which TSRI is growing has slowed down. Why could this be happening? Well, let’s examine what’s transpiring with margins and if the rest of the industry is facing the same headwind.

NasdaqCM:TSRI Income Statement Export October 23rd 18
NasdaqCM:TSRI Income Statement Export October 23rd 18

In terms of returns from investment, TSR has fallen short of achieving a 20% return on equity (ROE), recording 5.5% instead. Furthermore, its return on assets (ROA) of 2.7% is below the US IT industry of 6.7%, indicating TSR’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for TSR’s debt level, has increased over the past 3 years from 7.1% to 8.7%.

What does this mean?

TSR’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as TSR gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research TSR to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for TSRI’s future growth? Take a look at our free research report of analyst consensus for TSRI’s outlook.

  2. Financial Health: Are TSRI’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 31 August 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.