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Has Edenred SA (EPA:EDEN) Improved Earnings Growth In Recent Times?

Examining Edenred SA’s (ENXTPA:EDEN) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess EDEN’s latest performance announced on 31 December 2017 and weigh these figures against its longer term trend and industry movements. Check out our latest analysis for Edenred

How EDEN fared against its long-term earnings performance and its industry

I look at 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 method allows me to examine different stocks in a uniform manner using new information. For Edenred, its most recent bottom-line (trailing twelve month) is €247.00M, which, against the previous year’s figure, has climbed up by 37.22%. Given that these figures are somewhat short-term thinking, I’ve created an annualized five-year value for EDEN’s earnings, which stands at €179.26M This shows that, on average, Edenred has been able to consistently raise its earnings over the past few years as well.

ENXTPA:EDEN Income Statement Jun 1st 18
ENXTPA:EDEN Income Statement Jun 1st 18

What’s enabled this growth? Let’s see whether it is only a result of an industry uplift, or if Edenred has experienced some company-specific growth. In the past few years, Edenred expanded its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Eyeballing growth from a sector-level, the FR commercial services industry has been growing its average earnings by double-digit 10.63% over the previous twelve months, and 10.40% over the past half a decade. This means any tailwind the industry is benefiting from, Edenred is able to leverage this to its advantage.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Edenred gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Edenred to get a more holistic view of the stock by looking at:

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

  2. Financial Health: Is EDEN’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 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.

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