Analyzing PerkinElmer, Inc.'s (NYSE:PKI) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess PKI's recent performance announced on 29 December 2019 and compare these figures to its long-term trend and industry movements.
How Well Did PKI Perform?
PKI's trailing twelve-month earnings (from 29 December 2019) of US$228m has declined by -3.6% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 6.3%, indicating the rate at which PKI is growing has slowed down. Why could this be happening? Let's examine what's occurring with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, PerkinElmer has fallen short of achieving a 20% return on equity (ROE), recording 8.1% instead. Furthermore, its return on assets (ROA) of 4.4% is below the US Life Sciences industry of 7.4%, indicating PerkinElmer's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for PerkinElmer’s debt level, has declined over the past 3 years from 8.3% to 7.3%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 49% to 72% over the past 5 years.
What does this mean?
PerkinElmer's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I recommend you continue to research PerkinElmer to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PKI’s future growth? Take a look at our free research report of analyst consensus for PKI’s outlook.
- Financial Health: Are PKI’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 29 December 2019. This may not be consistent with full year annual report figures.
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.
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