Assessing Scout24 AG’s (FRA:G24) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess G24’s latest performance announced on 31 March 2018 and evaluate these figures to its historical trend and industry movements. Check out our latest analysis for Scout24
How G24 fared against its long-term earnings performance and its industry
G24’s trailing twelve-month earnings (from 31 March 2018) of €116.88m has jumped 49.36% compared to the previous year. However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 72.03%, indicating the rate at which G24 is growing has slowed down. What could be happening here? Well, let’s take a look at what’s going on with margins and whether the rest of the industry is experiencing the hit as well.
In the past couple of years, revenue growth has not been able to catch up, which implies that Scout24’s bottom line has been driven by unsustainable cost-cutting. Inspecting growth from a sector-level, the DE internet industry has been growing its average earnings by double-digit 17.53% over the past twelve months, and 21.05% over the last five years. This means whatever uplift the industry is deriving benefit from, Scout24 is able to leverage this to its advantage.
In terms of returns from investment, Scout24 has not invested its equity funds well, leading to a 10.64% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 6.01% is below the DE Internet industry of 7.35%, indicating Scout24’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Scout24’s debt level, has increased over the past 3 years from -0.33% to 8.77%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Scout24 to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for G24’s future growth? Take a look at our free research report of analyst consensus for G24’s outlook.
- Financial Health: Is G24’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 31 March 2018. 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.