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Examining how U.S. Physical Therapy, Inc. (NYSE:USPH) is performing as a company requires looking at more than just a years' earnings. Below, I will run you through a simple sense check to build perspective on how U.S. Physical Therapy is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its healthcare industry peers.
Commentary On USPH's Past Performance
USPH's trailing twelve-month earnings (from 31 March 2019) of US$18m has declined by -12% 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 0.3%, indicating the rate at which USPH is growing has slowed down. What could be happening here? Well, let’s take a look at what’s transpiring with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, U.S. Physical Therapy has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. Furthermore, its return on assets (ROA) of 3.8% is below the US Healthcare industry of 5.3%, indicating U.S. Physical Therapy's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for U.S. Physical Therapy’s debt level, has declined over the past 3 years from 17% to 14%.
What does this mean?
U.S. Physical Therapy's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Generally companies that face a drawn out period of decline in earnings are undergoing some sort of reinvestment phase Though if the entire industry is struggling to grow over time, it may be a indicator of a structural change, which makes U.S. Physical Therapy and its peers a higher risk investment. I suggest you continue to research U.S. Physical Therapy to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for USPH’s future growth? Take a look at our free research report of analyst consensus for USPH’s outlook.
- Financial Health: Are USPH’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 firstname.lastname@example.org. 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.