Was RYB Education Inc’s (NYSE:RYB) Earnings Growth Better Than Industry?
For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at RYB Education Inc’s (NYSE:RYB) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for RYB Education
Commentary On RYB’s Past Performance
For the purpose of this commentary, I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique enables me to examine various companies on a more comparable basis, using new information. “For RYB Education, its “, latest twelve-month earnings is $7.0M, which, against the previous year’s level, has risen by a substantial 78.73%. Given that these figures are somewhat short-term thinking, I’ve created an annualized five-year figure for RYB Education’s net income, which stands at $3.2M. This shows that, generally, RYB Education has been able to consistently grow its earnings over the past couple of years as well.
How has it been able to do this? Let’s see whether it is only due to an industry uplift, or if RYB Education has experienced some company-specific growth. In the past few years, RYB Education grew its bottom line faster than revenue by successfully controlling its costs. This brought about a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US consumer services industry has been growing its average earnings by double-digit 33.56% in the past year, and a flatter -1.68% over the past five years. This shows that, in the recent industry expansion, RYB Education is capable of amplifying this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as RYB Education gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research RYB Education to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for RYB’s future growth? Take a look at our free research report of analyst consensus for RYB’s outlook.
2. Financial Health: Is RYB’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.
