Measuring Ter Beke NV's (EBR:TERB) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess TERB's recent performance announced on 30 June 2019 and compare these figures to its historical trend and industry movements.
Did TERB perform better than its track record and industry?
TERB's trailing twelve-month earnings (from 30 June 2019) of €9.4m has declined by -0.8% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 4.4%, indicating the rate at which TERB is growing has slowed down. What could be happening here? Let's examine what's transpiring with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, Ter Beke has fallen short of achieving a 20% return on equity (ROE), recording 7.7% instead. Furthermore, its return on assets (ROA) of 2.6% is below the BE Food industry of 3.1%, indicating Ter Beke's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Ter Beke’s debt level, has declined over the past 3 years from 13% to 7.6%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 56% to 111% over the past 5 years.
What does this mean?
Ter Beke's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Usually companies that endure a drawn out period of decline in earnings are going through some sort of reinvestment phase However, if the whole industry is struggling to grow over time, it may be a sign of a structural change, which makes Ter Beke and its peers a riskier investment. I recommend you continue to research Ter Beke to get a more holistic view of the stock by looking at:
- Financial Health: Are TERB’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.
- Valuation: What is TERB worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether TERB is currently mispriced by the market.
- 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.
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