Analyzing Issuer Direct Corporation’s (NYSEMKT:ISDR) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess ISDR’s recent performance announced on 31 March 2018 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for Issuer Direct
Did ISDR beat its long-term earnings growth trend and its industry?
ISDR’s trailing twelve-month earnings (from 31 March 2018) of US$1.87m has jumped 34.56% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 30.15%, indicating the rate at which ISDR is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is merely because of an industry uplift, or if Issuer Direct has seen some company-specific growth.
In the past few years, Issuer Direct expanded its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the US internet industry has been growing its average earnings by double-digit 17.40% in the past year, and 18.27% over the past half a decade. This shows that any tailwind the industry is enjoying, Issuer Direct is able to amplify this to its advantage.
In terms of returns from investment, Issuer Direct has not invested its equity funds well, leading to a 13.60% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 10.72% exceeds the US Internet industry of 7.42%, indicating Issuer Direct has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Issuer Direct’s debt level, has increased over the past 3 years from -2.55% to 13.03%.
What does this mean?
Though Issuer Direct’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? I recommend you continue to research Issuer Direct to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for ISDR’s future growth? Take a look at our free research report of analyst consensus for ISDR’s outlook.
- Financial Health: Is ISDR’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 2018. 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.