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IVE Group Limited (ASX:IGL): Has Recent Earnings Growth Beaten Long-Term Trend?

Simply Wall St

Today I will take a look at IVE Group Limited's (ASX:IGL) most recent earnings update (30 June 2019) and compare these latest figures against its performance over the past few years, as well as how the rest of the media industry performed. As an investor, I find it beneficial to assess IGL’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 IVE Group

Commentary On IGL's Past Performance

IGL's trailing twelve-month earnings (from 30 June 2019) of AU$31m has jumped 22% 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 39%, indicating the rate at which IGL is growing has slowed down. Why could this be happening? Well, let's examine what's transpiring with margins and if the rest of the industry is feeling the heat.

ASX:IGL Income Statement, September 30th 2019
ASX:IGL Income Statement, September 30th 2019

In terms of returns from investment, IVE Group has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 7.7% exceeds the AU Media industry of 4.6%, indicating IVE Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for IVE Group’s debt level, has increased over the past 3 years from 10% to 14%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. While IVE Group has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research IVE Group to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for IGL’s future growth? Take a look at our free research report of analyst consensus for IGL’s outlook.

  2. Financial Health: Are IGL’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.