Understanding how Grodno Spólka Akcyjna (WSE:GRN) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Grodno Spólka Akcyjna is doing by comparing its latest earnings with its long-term trend as well as the performance of its trade distributors industry peers. View our latest analysis for Grodno Spólka Akcyjna
Was GRN’s recent earnings decline worse than the long-term trend and the 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 analyze various companies in a uniform manner using the most relevant data points. For Grodno Spólka Akcyjna, its latest earnings (trailing twelve month) is ZŁ8.66M, which, relative to last year’s figure, has fallen by -0.97%. Since these figures are somewhat myopic, I have estimated an annualized five-year figure for GRN’s net income, which stands at ZŁ5.47M This shows that, generally, Grodno Spólka Akcyjna has been able to increase its earnings over the past few years.
What’s the driver of this growth? Let’s see whether it is solely a result of industry tailwinds, or if Grodno Spólka Akcyjna has seen some company-specific growth. In the past couple of years, Grodno Spólka Akcyjna increased its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Eyeballing growth from a sector-level, the PL trade distributors industry has been relatively flat in terms of earnings growth over the previous few years. This means that whatever near-term headwind the industry is enduring, Grodno Spólka Akcyjna is less exposed compared to its peers.
What does this mean?
Though Grodno Spólka Akcyjna’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I suggest you continue to research Grodno Spólka Akcyjna to get a more holistic view of the stock by looking at:
- 1. Financial Health: Is GRN’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 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.