Has Trade Me Group Limited (NZE:TME) Improved Earnings Growth In Recent Times?
Measuring Trade Me Group Limited’s (NZSE:TME) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess TME’s recent performance announced on 31 December 2017 and compare these figures to its historical trend and industry movements. View our latest analysis for Trade Me Group
Did TME’s recent earnings growth beat the long-term trend and the industry?
For the most up-to-date info, I use data from the most recent 12 months, 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 blend enables me to analyze many different companies in a uniform manner using the most relevant data points. For Trade Me Group, its latest earnings (trailing twelve month) is NZ$94.35M, which, relative to last year’s figure, has increased by 14.34%. Given that these figures are fairly myopic, I’ve computed an annualized five-year value for TME’s earnings, which stands at NZ$79.82M This means generally, Trade Me Group has been able to increasingly grow its net income over the last few years as well.
How has it been able to do this? Well, let’s take a look at if it is merely attributable to an industry uplift, or if Trade Me Group has experienced some company-specific growth. The hike in earnings seems to be supported by a strong top-line increase beating its growth rate of costs. Though this resulted in a margin contraction, it has made Trade Me Group more profitable. Looking at growth from a sector-level, the NZ online retail industry has been growing its average earnings by double-digit 14.34% over the prior twelve months, and 23.58% over the past five years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Trade Me Group to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TME’s future growth? Take a look at our free research report of analyst consensus for TME’s outlook.
Financial Health: Is TME’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 December 2017. 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.
