Examining Moncler SpA’s (BIT:MONC) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess MONC’s latest performance announced on 30 June 2018 and weight these figures against its longer term trend and industry movements.
Commentary On MONC’s Past Performance
MONC’s trailing twelve-month earnings (from 30 June 2018) of €269.5m has jumped 31.9% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 21.3%, indicating the rate at which MONC is growing has accelerated. How has it been able to do this? Let’s see whether it is only attributable to industry tailwinds, or if Moncler has experienced some company-specific growth.
Over the last few years, Moncler grew its bottom line faster than revenue by efficiently controlling its costs. This brought about a margin expansion and profitability over time. Viewing growth from a sector-level, the IT luxury industry has been growing its average earnings by double-digit 11.8% in the previous year, and a more subdued 7.5% over the past half a decade. This growth is a median of profitable companies of 13 Luxury companies in IT including OVS, Salvatore Ferragamo and CSP International Fashion Group. This means that whatever uplift the industry is profiting from, Moncler is able to amplify this to its advantage.
In terms of returns from investment, Moncler has invested its equity funds well leading to a 31.0% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 20.5% exceeds the IT Luxury industry of 6.9%, indicating Moncler has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Moncler’s debt level, has increased over the past 3 years from 34.7% to 35.2%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 144% to 9.4% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Moncler gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Moncler to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MONC’s future growth? Take a look at our free research report of analyst consensus for MONC’s outlook.
- Financial Health: Are MONC’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 30 June 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at firstname.lastname@example.org.