Assessing TowneBank’s (NASDAQ:TOWN) 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 TOWN’s recent performance announced on 30 September 2017 and evaluate these figures to its long-term trend and industry movements. Check out our latest analysis for TowneBank
Were TOWN’s earnings stronger than its past performances and the industry?
I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to assess many different companies in a uniform manner using the most relevant data points. TowneBank’s most recent twelve-month earnings is $94.3M, which compared to the previous year’s level, has increased by an impressive 55.35%. Given that these figures may be fairly myopic, I’ve calculated an annualized five-year figure for TOWN’s earnings, which stands at $44.7M. This means on average, TowneBank has been able to steadily grow its net income over the last couple of years as well.
What’s enabled this growth? Let’s see whether it is only attributable to an industry uplift, or if TowneBank has seen some company-specific growth. Over the last few years, TowneBank increased its bottom line faster than revenue by effectively controlling its costs. This has caused a margin expansion and profitability over time. Viewing growth from a sector-level, the US banks industry has been growing its average earnings by double-digit 10.20% in the prior twelve months, and a more muted 9.05% over the past five years. This suggests that any tailwind the industry is benefiting from, TowneBank is able to amplify this to its advantage.
What does this mean?
Though TowneBank’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research TowneBank to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for TOWN’s future growth? Take a look at our free research report of analyst consensus for TOWN’s outlook.
2. Financial Health: Is TOWN’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.
3. 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.