Was Echo Global Logistics, Inc.'s (NASDAQ:ECHO) Earnings Growth Better Than The Industry's?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Assessing Echo Global Logistics, Inc.'s (NASDAQ:ECHO) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess ECHO's recent performance announced on 31 March 2019 and evaluate these figures to its longer term trend and industry movements.
Check out our latest analysis for Echo Global Logistics
How Did ECHO's Recent Performance Stack Up Against Its Past?
ECHO's trailing twelve-month earnings (from 31 March 2019) of US$27m has jumped 36% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 16%, indicating the rate at which ECHO is growing has accelerated. What's enabled this growth? Let's take a look at whether it is merely a result of industry tailwinds, or if Echo Global Logistics has seen some company-specific growth.
In terms of returns from investment, Echo Global Logistics has fallen short of achieving a 20% return on equity (ROE), recording 7.2% instead. Furthermore, its return on assets (ROA) of 4.8% is below the US Logistics industry of 5.7%, indicating Echo Global Logistics's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Echo Global Logistics’s debt level, has increased over the past 3 years from 3.6% to 8.6%.
What does this mean?
Though Echo Global Logistics's past data is helpful, it is only one aspect of my investment thesis. While Echo Global Logistics has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Echo Global Logistics to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ECHO’s future growth? Take a look at our free research report of analyst consensus for ECHO’s outlook.
Financial Health: Are ECHO’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 March 2019. This may not be consistent with full year annual report figures.
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.
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. Thank you for reading.
