When Kandi Technologies Group Inc (NASDAQ:KNDI) released its most recent earnings update (30 June 2018), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Kandi Technologies Group’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not KNDI actually performed well. Below is a quick commentary on how I see KNDI has performed.
Did KNDI perform better than its track record and industry?
KNDI recently turned a profit of US$12.47m (most recent trailing twelve-months) compared to its average loss of -US$2.43m over the past five years.
In the last few years, Kandi Technologies Group top-line expansion has outstripped earnings and the growth rate of expenses. Though this resulted in a margin contraction, it has softened Kandi Technologies Group’s earnings contraction. Viewing growth from a sector-level, the US auto components industry has been growing its average earnings by double-digit 10.74% over the previous twelve months, and 11.09% over the last five years. This growth is a median of profitable companies of 25 Auto Components companies in US including Motorcar Parts of America, Cooper Tire & Rubber and Goodyear Tire & Rubber. This means that whatever tailwind the industry is enjoying, Kandi Technologies Group has not been able to leverage it as much as its average peer.
In terms of returns from investment, Kandi Technologies Group has fallen short of achieving a 20% return on equity (ROE), recording 5.11% instead. Furthermore, its return on assets (ROA) of 2.78% is below the US Auto Components industry of 6.49%, indicating Kandi Technologies Group’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Kandi Technologies Group’s debt level, has declined over the past 3 years from 13.20% to 4.05%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. I suggest you continue to research Kandi Technologies Group to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for KNDI’s future growth? Take a look at our free research report of analyst consensus for KNDI’s outlook.
- Financial Health: Are KNDI’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 email@example.com.