Examining Pragma Inkaso SA.’s (WSE:PRI) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess PRI’s latest performance announced on 30 September 2017 and weigh these figures against its longer term trend and industry movements. View our latest analysis for Pragma Inkaso
How Did PRI’s Recent Performance Stack Up Against Its Past?
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 allows me to analyze different companies on a more comparable basis, using the most relevant data points. For Pragma Inkaso, its most recent earnings (trailing twelve month) is ZŁ367.39K, which, against the prior year’s figure, has sunken by a substantial -92.21%. Given that these figures are relatively short-term, I’ve estimated an annualized five-year figure for Pragma Inkaso’s net income, which stands at ZŁ3.82M This doesn’t seem to paint a better picture, since earnings seem to have gradually been falling over the longer term.
What could be happening here? Let’s examine what’s occurring with margins and if the whole industry is facing the same headwind. Revenue growth in the past few years, has been positive, however earnings growth has been falling. This implies that Pragma Inkaso has been ramping up expenses, which is hurting margins and earnings, and is not a sustainable practice. Scanning growth from a sector-level, the PL diversified financial industry has been enduring severe headwinds over the previous couple of years, leading to an average earnings drop of -31.02% in the most recent year. This suggests that whatever headwind the industry is facing, it’s hitting Pragma Inkaso harder than its peers.
What does this mean?
Though Pragma Inkaso’s past data is helpful, it is only one aspect of my investment thesis. In some cases, companies that face a prolonged period of reduction in earnings are undergoing some sort of reinvestment phase However, if the entire industry is struggling to grow over time, it may be a indicator of a structural shift, which makes Pragma Inkaso and its peers a riskier investment. I recommend you continue to research Pragma Inkaso to get a more holistic view of the stock by looking at:
- 1. Financial Health: Is PRI’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. 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.