Assessing PowerShares QQQ Trust Series 1’s (NASDAQ:QQQ) 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 QQQ’s recent performance announced on 30 September 2017 and evaluate these figures to its long-term trend and industry movements. View our latest analysis for PowerShares QQQ Trust Series 1
How Did QQQ’s Recent Performance Stack Up Against Its Past?
I use data from the most recent 12 months, 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 blend enables me to assess different companies on a similar basis, using the most relevant data points. For PowerShares QQQ Trust Series 1, its most recent trailing-twelve-month earnings is $9,803.4M, which, in comparison to the prior year’s level, has climbed up by a substantial 65.66%. Given that these values are fairly short-term thinking, I have created an annualized five-year figure for QQQ’s earnings, which stands at $5,886.0M. This suggests that, generally, PowerShares QQQ Trust Series 1 has been able to increasingly grow its profits over the last few years as well.
How has it been able to do this? Let’s take a look at whether it is solely due to industry tailwinds, or if PowerShares QQQ Trust Series 1 has experienced some company-specific growth. In the last few years, PowerShares QQQ Trust Series 1 increased its bottom line faster than revenue by successfully controlling its costs. This resulted in a margin expansion and profitability over time. Viewing growth from a sector-level, the US capital markets industry has been growing its average earnings by double-digit 17.00% over the prior twelve months, and 10.45% over the previous five years. This means any uplift the industry is profiting from, PowerShares QQQ Trust Series 1 is able to amplify this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While PowerShares QQQ Trust Series 1 has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research PowerShares QQQ Trust Series 1 to get a better picture of the stock by looking at:
1. Financial Health: Is QQQ’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 QQQ 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 QQQ 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.