Was Thermo Fisher Scientific Inc’s (NYSE:TMO) Earnings Growth Better Than The Industry’s?
Assessing Thermo Fisher Scientific Inc’s (NYSE:TMO) 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 TMO’s latest performance announced on 29 September 2018 and evaluate these figures to its historical trend and industry movements.
See our latest analysis for Thermo Fisher Scientific
Did TMO’s recent earnings growth beat the long-term trend and the industry?
TMO’s trailing twelve-month earnings (from 29 September 2018) of US$2.6b has jumped 10% 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 11%, indicating the rate at which TMO is growing has slowed down. What could be happening here? Well, let’s take a look at what’s occurring with margins and whether the entire industry is facing the same headwind.
In terms of returns from investment, Thermo Fisher Scientific has fallen short of achieving a 20% return on equity (ROE), recording 9.6% instead. Furthermore, its return on assets (ROA) of 5.6% is below the US Life Sciences industry of 5.7%, indicating Thermo Fisher Scientific’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Thermo Fisher Scientific’s debt level, has increased over the past 3 years from 6.7% to 7.3%.
What does this mean?
Though Thermo Fisher Scientific’s past data is helpful, it is only one aspect of my investment thesis. While Thermo Fisher Scientific has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Thermo Fisher Scientific to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TMO’s future growth? Take a look at our free research report of analyst consensus for TMO’s outlook.
Financial Health: Are TMO’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 29 September 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
