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For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on OraSure Technologies, Inc. (NASDAQ:OSUR) useful as an attempt to give more color around how OraSure Technologies is currently performing.
Commentary On OSUR's Past Performance
OSUR's trailing twelve-month earnings (from 31 March 2019) of US$19m has jumped 18% 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 42%, indicating the rate at which OSUR is growing has slowed down. Why could this be happening? Well, let's examine what's transpiring with margins and whether the whole industry is experiencing the hit as well.
In terms of returns from investment, OraSure Technologies has fallen short of achieving a 20% return on equity (ROE), recording 6.9% instead. Furthermore, its return on assets (ROA) of 6.0% is below the US Medical Equipment industry of 6.8%, indicating OraSure Technologies's are utilized less efficiently. However, its return on capital (ROC), which also accounts for OraSure Technologies’s debt level, has increased over the past 3 years from 6.6% to 10%.
What does this mean?
Though OraSure Technologies's past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research OraSure Technologies to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for OSUR’s future growth? Take a look at our free research report of analyst consensus for OSUR’s outlook.
- Financial Health: Are OSUR’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 31 March 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 firstname.lastname@example.org. 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.