Analyzing Warpaint London PLC’s (AIM:W7L) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess W7L’s recent performance announced on 31 December 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for Warpaint London
How W7L fared against its long-term earnings performance and its industry
I prefer 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 enables me to analyze many different companies in a uniform manner using the latest information. For Warpaint London, its most recent earnings (trailing twelve month) is UK£5.47M, which, in comparison to the prior year’s level, has moved up by an impressive 74.24%. Given that these figures may be relatively myopic, I have calculated an annualized five-year figure for Warpaint London’s earnings, which stands at UK£4.10M This suggests that, generally, Warpaint London has been able to gradually grow its net income over the last couple of years as well.
How has it been able to do this? Let’s see if it is merely due to an industry uplift, or if Warpaint London has seen some company-specific growth. In the last few years, Warpaint London top-line expansion has overtaken earnings and the growth rate of expenses. Though this resulted in a margin contraction, it has moderated Warpaint London’s earnings contraction. Scanning growth from a sector-level, the UK personal products industry has been growing its average earnings by double-digit 27.10% in the prior twelve months, and 29.75% over the previous five years. This means any tailwind the industry is profiting from, Warpaint London is capable of amplifying this to its advantage.
What does this mean?
Though Warpaint London’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Warpaint London gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Warpaint London to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for W7L’s future growth? Take a look at our free research report of analyst consensus for W7L’s outlook.
- Financial Health: Is W7L’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 31 December 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.