Examining Performance Technologies S.A.'s (ATSE:PERF) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess PERF's latest performance announced on 30 June 2019 and compare these figures to its longer term trend and industry movements.
How PERF fared against its long-term earnings performance and its industry
PERF's trailing twelve-month earnings (from 30 June 2019) of €1.2m has jumped 13% 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 66%, indicating the rate at which PERF is growing has slowed down. Why could this be happening? Well, let's examine what's going on with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, Performance Technologies has invested its equity funds well leading to a 26% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 11% exceeds the GR IT industry of 5.6%, indicating Performance Technologies has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Performance Technologies’s debt level, has increased over the past 3 years from 29% to 35%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 90% to 54% over the past 5 years.
What does this mean?
Though Performance Technologies'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 suggest you continue to research Performance Technologies to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PERF’s future growth? Take a look at our free research report of analyst consensus for PERF’s outlook.
- Financial Health: Are PERF’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 2019. This may not be consistent with full year annual report figures.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.