When Shaver Shop Group Limited (ASX:SSG) released its most recent earnings update (30 June 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Shaver Shop Group's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not SSG actually performed well. Below is a quick commentary on how I see SSG has performed.
Did SSG's recent performance beat its trend and industry?
SSG's trailing twelve-month earnings (from 30 June 2019) of AU$6.7m has increased by 1.7% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 0.3%, indicating the rate at which SSG is growing has accelerated. What's enabled this growth? Let's see whether it is merely owing to an industry uplift, or if Shaver Shop Group has seen some company-specific growth.
In terms of returns from investment, Shaver Shop Group has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 7.8% is below the AU Specialty Retail industry of 8.2%, indicating Shaver Shop Group's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Shaver Shop Group’s debt level, has declined over the past 3 years from 19% to 14%.
What does this mean?
Shaver Shop Group's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. You should continue to research Shaver Shop Group to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SSG’s future growth? Take a look at our free research report of analyst consensus for SSG’s outlook.
- Financial Health: Are SSG’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 June 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 firstname.lastname@example.org. 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.
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