PageGroup plc (LON:PAGE): Has Recent Earnings Growth Beaten Long-Term Trend?
Measuring PageGroup plc’s (LSE:PAGE) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess PAGE’s recent performance announced on 30 June 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for PageGroup
How PAGE fared against its long-term earnings performance and its industry
I look at the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This technique enables me to analyze different stocks on a similar basis, using the latest information. PageGroup’s latest earnings is £79.2M, which, relative to the previous year’s figure, has climbed up by 10.52%. Since these figures are relatively short-term, I have estimated an annualized five-year figure for PageGroup’s earnings, which stands at £56.6M. This suggests that, generally, PageGroup has been able to increasingly grow its profits over the past couple of years as well.
What’s the driver of this growth? Let’s see if it is solely due to industry tailwinds, or if PageGroup has seen some company-specific growth. Over the past few years, PageGroup expanded its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Eyeballing growth from a sector-level, the UK professional services industry has been growing, albeit, at a unexciting single-digit rate of 3.53% in the past year, and 8.02% over the past five. This shows that any near-term headwind the industry is enduring, the impact on PageGroup has been softer relative to its peers.
What does this mean?
PageGroup’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as PageGroup gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research PageGroup to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for PAGE’s future growth? Take a look at our free research report of analyst consensus for PAGE’s outlook.
2. Financial Health: Is PAGE’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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
