Assessing Malvern Bancorp Inc’s (NASDAQ:MLVF) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Malvern Bancorp is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its mortgage industry peers. View our latest analysis for Malvern Bancorp
Was MLVF weak performance lately part of a long-term decline?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to examine various companies on a similar basis, using the most relevant data points. For Malvern Bancorp, its most recent earnings (trailing twelve month) is $5.8M, which, relative to the previous year’s figure, has declined by a substantial -52.12%. Given that these values are somewhat nearsighted, I have determined an annualized five-year figure for MLVF’s earnings, which stands at -$0.6M. This means although earnings growth was negative from last year, over time, Malvern Bancorp’s profits have been growing on average.
How has it been able to do this? Well, let’s take a look at if it is merely due to industry tailwinds, or if Malvern Bancorp has experienced some company-specific growth. Over the last couple of years, Malvern Bancorp expanded its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the US mortgage industry has been growing its average earnings by double-digit 10.05% over the past year, and 13.99% over the last five years. This means whatever tailwind the industry is deriving benefit from, Malvern Bancorp has not been able to leverage it as much as its industry peers.
What does this mean?
Malvern Bancorp’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies are profitable, but have volatile earnings, can have many factors affecting its business. You should continue to research Malvern Bancorp to get a better picture of the stock by looking at:
- 1. Financial Health: Is MLVF’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.
- 2. Valuation: What is MLVF worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MLVF is currently mispriced by the market.
- 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 September 2017. 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.