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Interested In Harvey Norman Holdings Limited (ASX:HVN)? Here's What Its Recent Performance Looks Like

Simply Wall St

For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Harvey Norman Holdings Limited (ASX:HVN) useful as an attempt to give more color around how Harvey Norman Holdings is currently performing.

See our latest analysis for Harvey Norman Holdings

Commentary On HVN's Past Performance

HVN's trailing twelve-month earnings (from 30 June 2019) of AU$402m has increased by 7.2% 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 11%, indicating the rate at which HVN is growing has slowed down. Why could this be happening? Well, let's look at what's occurring with margins and whether the rest of the industry is feeling the heat.

ASX:HVN Income Statement, September 29th 2019

In terms of returns from investment, Harvey Norman Holdings has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 8.1% exceeds the AU Multiline Retail industry of 3.9%, indicating Harvey Norman Holdings has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Harvey Norman Holdings’s debt level, has declined over the past 3 years from 14% to 12%.

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 Harvey Norman Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Harvey Norman Holdings to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for HVN’s future growth? Take a look at our free research report of analyst consensus for HVN’s outlook.
  2. Financial Health: Are HVN’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 30 June 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 editorial-team@simplywallst.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.