Should You Be Happy With Allied Motion Technologies Inc.'s (NASDAQ:AMOT) 6.9% Earnings Growth?
When Allied Motion Technologies Inc. (NasdaqGM:AMOT) released its most recent earnings update (31 December 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Allied Motion Technologies has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I've summarized the key takeaways on how I see AMOT has performed.
See our latest analysis for Allied Motion Technologies
How Did AMOT's Recent Performance Stack Up Against Its Past?
AMOT's trailing twelve-month earnings (from 31 December 2019) of US$17m has increased by 6.9% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.5%, indicating the rate at which AMOT is growing has accelerated. What's the driver of this growth? Well, let’s take a look at whether it is merely attributable to industry tailwinds, or if Allied Motion Technologies has experienced some company-specific growth.
In terms of returns from investment, Allied Motion Technologies has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 7.2% exceeds the US Electrical industry of 6.5%, indicating Allied Motion Technologies has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Allied Motion Technologies’s debt level, has declined over the past 3 years from 12% to 11%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Allied Motion Technologies to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for AMOT’s future growth? Take a look at our free research report of analyst consensus for AMOT’s outlook.
Financial Health: Are AMOT’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 31 December 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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