Interested In Lookers plc (LSE:LOOK)? Here’s What Its Recent Track-Record Looks Like
When Lookers plc (LSE:LOOK) released its most recent earnings update (30 June 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Lookers’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not LOOK actually performed well. Below is a quick commentary on how I see LOOK has performed. See our latest analysis for LOOK
How LOOK fared against its long-term earnings performance and its industry
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend allows me to examine different stocks in a uniform manner using the latest information. For Lookers, the latest earnings is £76M, which compared to the prior year’s figure, has moved up by a significant 89.11%. Given that these figures are somewhat short-term, I have estimated an annualized five-year figure for Lookers’s earnings, which stands at £39M. This means on average, Lookers has been able to steadily improve its earnings over the past few years as well.
What’s enabled this growth? Let’s take a look at if it is solely because of industry tailwinds, or if Lookers has experienced some company-specific growth. Over the last couple of years, Lookers expanded its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Looking at growth from a sector-level, the UK specialty retail industry has been growing, albeit, at a subdued single-digit rate of 5.58% in the past twelve months, and 6.87% over the previous few years. This means any uplift the industry is profiting from, Lookers is capable of amplifying this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Lookers to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for LOOK’s future growth? Take a look at our free research report of analyst consensus for LOOK’s outlook.
2. Financial Health: Is LOOK’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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
