Has Scholastic Corporation (NASDAQ:SCHL) Improved Earnings Growth In Recent Times?
Understanding Scholastic Corporation's (NasdaqGS:SCHL) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Scholastic is doing by evaluating its latest earnings with its longer term trend as well as its industry peers' performance over the same period.
See our latest analysis for Scholastic
Did SCHL beat its long-term earnings growth trend and its industry?
SCHL's trailing twelve-month earnings (from 30 November 2019) of US$18m has jumped 49% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -1.8%, indicating the rate at which SCHL is growing has accelerated. What's the driver of this growth? Let's take a look at if it is solely due to industry tailwinds, or if Scholastic has experienced some company-specific growth.
In terms of returns from investment, Scholastic has fallen short of achieving a 20% return on equity (ROE), recording 1.4% instead. Furthermore, its return on assets (ROA) of 0.7% is below the US Media industry of 6.1%, indicating Scholastic's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Scholastic’s debt level, has declined over the past 3 years from 8.9% to 2.8%.
What does this mean?
Scholastic's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. You should continue to research Scholastic to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for SCHL’s future growth? Take a look at our free research report of analyst consensus for SCHL’s outlook.
Financial Health: Are SCHL’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 November 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 editorial-team@simplywallst.com. 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
