Examining Axfood AB (publ)'s (OM:AXFO) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess AXFO's latest performance announced on 30 September 2019 and weigh these figures against its longer term trend and industry movements.
Commentary On AXFO's Past Performance
AXFO's trailing twelve-month earnings (from 30 September 2019) of kr1.6b has increased by 5.3% 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 6.5%, indicating the rate at which AXFO is growing has slowed down. Why could this be happening? Well, let's look at what's going on with margins and whether the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Axfood has invested its equity funds well leading to a 42% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 10% exceeds the SE Consumer Retailing industry of 4.0%, indicating Axfood has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Axfood’s debt level, has declined over the past 3 years from 40% to 24%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Axfood has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Axfood to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for AXFO’s future growth? Take a look at our free research report of analyst consensus for AXFO’s outlook.
- Financial Health: Are AXFO’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.
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