Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Forward Air Corporation’s (NASDAQ:FWRD) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for Forward Air
Were FWRD’s earnings stronger than its past performances and the industry?
I prefer to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to assess different companies in a uniform manner using the most relevant data points. For Forward Air, the most recent twelve-month earnings is $64.1M, which, against the prior year’s figure, has risen by a substantial 69.12%. Given that these values are relatively myopic, I’ve created an annualized five-year value for FWRD’s net income, which stands at $49.4M. This means generally, Forward Air has been able to gradually grow its bottom line over the past couple of years as well.
What’s the driver of this growth? Let’s take a look at if it is only a result of industry tailwinds, or if Forward Air has seen some company-specific growth. The hike in earnings seems to be driven by a robust top-line increase outstripping its growth rate of costs. Though this resulted in a margin contraction, it has made Forward Air more profitable. Eyeballing growth from a sector-level, the US logistics industry has been growing, albeit, at a subdued single-digit rate of 4.94% over the prior twelve months, and 6.49% over the previous few years. This suggests that any near-term headwind the industry is facing, Forward Air is relatively better-cushioned than its peers.
What does this mean?
Though Forward Air’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Forward Air gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Forward Air to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for FWRD’s future growth? Take a look at our free research report of analyst consensus for FWRD’s outlook.
2. Financial Health: Is FWRD’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 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.