Interested In Flagstar Bancorp Inc (NYSE:FBC)? Here’s How It Performed Recently
In this commentary, I will examine Flagstar Bancorp Inc’s (NYSE:FBC) latest earnings update (31 December 2017) and compare these figures against its performance over the past couple of years, as well as how the rest of the mortgage industry performed. As an investor, I find it beneficial to assess FBC’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. View our latest analysis for Flagstar Bancorp
Was FBC’s recent earnings decline worse than the long-term trend and the industry?
I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This technique enables me to assess different companies in a uniform manner using new information. For Flagstar Bancorp, its most recent trailing-twelve-month earnings is US$63.00M, which compared to last year’s level, has taken a dive by a substantial -58.82%. Given that these figures are fairly short-term, I’ve determined an annualized five-year figure for FBC’s net income, which stands at US$24.13M This suggests that while earnings growth was negative against last year, over the longer term, Flagstar Bancorp’s earnings have been growing on average.
What’s the driver of this growth? Well, let’s take a look at if it is only a result of an industry uplift, or if Flagstar Bancorp has seen some company-specific growth. Over the past few years, Flagstar Bancorp increased its bottom line faster than revenue by efficiently controlling its costs. This brought about a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US mortgage industry has been relatively flat in terms of earnings growth in the prior year, settling down from a robust 12.85% over the last five years. This suggests that whatever near-term headwind the industry is enduring, it’s hitting Flagstar Bancorp harder than its peers.
What does this mean?
Though Flagstar Bancorp’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I recommend you continue to research Flagstar Bancorp to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for FBC’s future growth? Take a look at our free research report of analyst consensus for FBC’s outlook.
2. Financial Health: Is FBC’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.
3. 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 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.
