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Assessing Hexagon Composites ASA's (OB:HEX) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess HEX's recent performance announced on 30 September 2019 and evaluate these figures to its longer term trend and industry movements.
Was HEX's weak performance lately a part of a long-term decline?
HEX's trailing twelve-month earnings (from 30 September 2019) of kr120m has declined by -20% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 9.9%, indicating the rate at which HEX is growing has slowed down. What could be happening here? Well, let’s take a look at what’s transpiring with margins and if the rest of the industry is facing the same headwind.
In terms of returns from investment, Hexagon Composites has fallen short of achieving a 20% return on equity (ROE), recording 5.5% instead. Furthermore, its return on assets (ROA) of 2.6% is below the NO Machinery industry of 5.3%, indicating Hexagon Composites's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Hexagon Composites’s debt level, has declined over the past 3 years from 2.4% to 0.8%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I recommend you continue to research Hexagon Composites to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for HEX’s future growth? Take a look at our free research report of analyst consensus for HEX’s outlook.
Financial Health: Are HEX’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 September 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 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.
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. Thank you for reading.