Analyzing Winmark Corporation’s (NASDAQ:WINA) 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 WINA’s recent performance announced on 30 September 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for Winmark
Could WINA beat the long-term trend and outperform its industry?
I like to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend enables me to assess various companies in a uniform manner using new information. Winmark’s most recent bottom-line is $23.1M, which compared to the prior year’s figure, has increased by a relatively soft 6.15%. Given that these figures are relatively myopic, I have created an annualized five-year figure for WINA’s earnings, which stands at $17.8M. This shows that, generally, Winmark has been able to consistently raise its profits over the past couple of years as well.
What’s enabled this growth? Let’s see whether it is merely attributable to industry tailwinds, or if Winmark has seen some company-specific growth. Over the last few years, Winmark increased its bottom line faster than revenue by successfully controlling its costs. This brought about a margin expansion and profitability over time. Looking at growth from a sector-level, the US specialty retail industry has been growing, albeit, at a muted single-digit rate of 8.14% over the past year, and 5.71% over the past couple of years. This means that any uplift the industry is deriving benefit from, Winmark has not been able to reap as much as its industry peers.
What does this mean?
Winmark’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 Winmark gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Winmark to get a more holistic view of the stock by looking at:
1. Financial Health: Is WINA’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.
2. 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.