Guaranty Bancshares Inc’s (NASDAQ:GNTY) Earnings Grew 19.12% In A Year. Was It Better Than Its Long-Term Trend?
When Guaranty Bancshares Inc (NASDAQ:GNTY) released its most recent earnings update (31 December 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Guaranty Bancshares performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see GNTY has performed. Check out our latest analysis for Guaranty Bancshares
How Did GNTY’s Recent Performance Stack Up Against Its Past?
For the purpose of this commentary, I like to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to analyze different companies on a similar basis, using the latest information. For Guaranty Bancshares, its latest trailing-twelve-month earnings is US$14.44M, which, against the previous year’s figure, has moved up by 19.12%. Since these figures may be fairly short-term, I have calculated an annualized five-year value for GNTY’s earnings, which stands at US$13.69M This shows that, on average, Guaranty Bancshares has been able to steadily raise its earnings over the past few years as well.
What’s the driver of this growth? Well, let’s take a look at if it is solely because of industry tailwinds, or if Guaranty Bancshares has experienced some company-specific growth. Over the past couple of years, Guaranty Bancshares top-line expansion has outpaced earnings and the growth rate of expenses. Though this resulted in a margin contraction, it has softened Guaranty Bancshares’s earnings contraction. Eyeballing growth from a sector-level, the US banks industry has been growing, albeit, at a subdued single-digit rate of 4.15% over the previous twelve months, and 8.60% over the last five years. This means that any recent headwind the industry is experiencing, the impact on Guaranty Bancshares has been softer relative to its peers.
What does this mean?
Guaranty Bancshares’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Guaranty Bancshares has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Guaranty Bancshares to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for GNTY’s future growth? Take a look at our free research report of analyst consensus for GNTY’s outlook.
2. Financial Health: Is GNTY’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.
