U.S. markets open in 5 hours 23 minutes
  • S&P Futures

    3,998.75
    -21.00 (-0.52%)
     
  • Dow Futures

    32,009.00
    -111.00 (-0.35%)
     
  • Nasdaq Futures

    12,292.75
    -90.00 (-0.73%)
     
  • Russell 2000 Futures

    1,778.60
    -10.90 (-0.61%)
     
  • Crude Oil

    109.14
    -1.35 (-1.22%)
     
  • Gold

    1,793.20
    -15.00 (-0.83%)
     
  • Silver

    20.91
    -0.09 (-0.43%)
     
  • EUR/USD

    1.0416
    -0.0001 (-0.01%)
     
  • 10-Yr Bond

    2.9350
    0.0000 (0.00%)
     
  • Vix

    29.85
    -1.92 (-6.04%)
     
  • GBP/USD

    1.2225
    -0.0037 (-0.31%)
     
  • USD/JPY

    129.3290
    +0.1440 (+0.11%)
     
  • BTC-USD

    29,692.43
    -88.01 (-0.30%)
     
  • CMC Crypto 200

    664.43
    -16.67 (-2.45%)
     
  • FTSE 100

    7,400.38
    -17.77 (-0.24%)
     
  • Nikkei 225

    26,547.05
    +119.40 (+0.45%)
     

Does Vestas Wind Systems A/S's (CPH:VWS) Recent Track Record Look Strong?

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

When Vestas Wind Systems A/S (CPSE:VWS) released its most recent earnings update (31 December 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Vestas Wind Systems performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see VWS has performed.

Check out our latest analysis for Vestas Wind Systems

How Did VWS's Recent Performance Stack Up Against Its Past?

VWS's trailing twelve-month earnings (from 31 December 2019) of €704m has increased by 2.9% 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 3.8%, indicating the rate at which VWS is growing has slowed down. To understand what's happening, let's look at what's going on with margins and whether the whole industry is experiencing the hit as well.

CPSE:VWS Income Statement, March 11th 2020
CPSE:VWS Income Statement, March 11th 2020

In terms of returns from investment, Vestas Wind Systems has invested its equity funds well leading to a 21% return on equity (ROE), above the sensible minimum of 20%. However, its return on assets (ROA) of 5.0% is below the DK Electrical industry of 5.7%, indicating Vestas Wind Systems's are utilized less efficiently. Furthermore, its return on capital (ROC), which also accounts for Vestas Wind Systems’s debt level, has declined over the past 3 years from 34% to 20%.

What does this mean?

Vestas Wind Systems's track record can be a valuable insight into its earnings performance, but it certainly 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 Vestas Wind Systems to get a more holistic view of the stock by looking at:

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

  2. Financial Health: Are VWS’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 December 2019. This may not be consistent with full year annual report figures.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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. Thank you for reading.