Tetra Tech, Inc. (NASDAQ:TTEK): Has Recent Earnings Growth Beaten Long-Term Trend?
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Assessing Tetra Tech, Inc.'s (NASDAQ:TTEK) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess TTEK's recent performance announced on 31 March 2019 and evaluate these figures to its long-term trend and industry movements.
Check out our latest analysis for Tetra Tech
Did TTEK's recent earnings growth beat the long-term trend and the industry?
TTEK's trailing twelve-month earnings (from 31 March 2019) of US$160m has jumped 15% 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 19%, indicating the rate at which TTEK is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s occurring with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Tetra Tech has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 8.9% exceeds the US Commercial Services industry of 6.6%, indicating Tetra Tech has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Tetra Tech’s debt level, has increased over the past 3 years from 12% to 16%.
What does this mean?
Though Tetra Tech's past data is helpful, it is only one aspect of my investment thesis. While Tetra Tech has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Tetra Tech to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TTEK’s future growth? Take a look at our free research report of analyst consensus for TTEK’s outlook.
Financial Health: Are TTEK’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 2019. This may not be consistent with full year annual report figures.
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.
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. Thank you for reading.
