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After looking at Nanometrics Incorporated's (NASDAQ:NANO) latest earnings announcement (30 March 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Nanometrics's performance has been impacted by industry movements. In this article I briefly touch on my key findings.
How Well Did NANO Perform?
NANO's trailing twelve-month earnings (from 30 March 2019) of US$44m has increased by 7.6% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 60%, indicating the rate at which NANO is growing has slowed down. What could be happening here? Well, let’s take a look at what’s occurring with margins and whether the whole industry is facing the same headwind.
In terms of returns from investment, Nanometrics has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 12% exceeds the US Semiconductor industry of 8.1%, indicating Nanometrics has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Nanometrics’s debt level, has increased over the past 3 years from 4.1% to 15%.
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 Nanometrics gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Nanometrics to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for NANO’s future growth? Take a look at our free research report of analyst consensus for NANO’s outlook.
- Financial Health: Are NANO’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 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.