In this article, I will take a look at Hailiang Education Group Inc’s (NASDAQ:HLG) most recent earnings update (30 June 2018) and compare these latest figures against its performance over the past few years, along with how the rest of HLG’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time.
How Did HLG’s Recent Performance Stack Up Against Its Past?
HLG’s trailing twelve-month earnings (from 30 June 2018) of CN¥223m has jumped 33% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 12%, indicating the rate at which HLG is growing has accelerated. What’s enabled this growth? Let’s see if it is merely due to industry tailwinds, or if Hailiang Education Group has seen some company-specific growth.
In terms of returns from investment, Hailiang Education Group has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 11% exceeds the US Consumer Services industry of 5.9%, indicating Hailiang Education Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Hailiang Education Group’s debt level, has increased over the past 3 years from 20% to 22%.
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 Hailiang Education Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Hailiang Education Group to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for HLG’s future growth? Take a look at our free research report of analyst consensus for HLG’s outlook.
- Financial Health: Are HLG’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 30 June 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at firstname.lastname@example.org.