Vishay Precision Group Inc (NYSE:VPG): Has Recent Earnings Growth Beaten Long-Term Trend?
Today I will take a look at Vishay Precision Group Inc’s (NYSE:VPG) most recent earnings update (31 March 2018) and compare these latest figures against its performance over the past few years, as well as how the rest of the electronic industry performed. As an investor, I find it beneficial to assess VPG’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. See our latest analysis for Vishay Precision Group
Could VPG beat the long-term trend and outperform its industry?
To account for any quarterly or half-yearly updates, 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 method allows me to assess different stocks on a similar basis, using the latest information. For Vishay Precision Group, its most recent trailing-twelve-month earnings is US$17.34M, which compared to last year’s level, has risen by more than double. Given that these figures are somewhat nearsighted, I have estimated an annualized five-year value for VPG’s net income, which stands at US$5.29M This means that, generally, Vishay Precision Group has been able to steadily grow its earnings over the last couple of years as well.
What’s enabled this growth? Well, let’s take a look at whether it is only attributable to an industry uplift, or if Vishay Precision Group has experienced some company-specific growth. Over the past couple of years, Vishay Precision Group top-line expansion has overtaken earnings and the growth rate of expenses. Though this has led to a margin contraction, it has moderated Vishay Precision Group’s earnings contraction. Eyeballing growth from a sector-level, the US electronic industry has been growing its average earnings by double-digit 15.94% over the past twelve months, and a more subdued 9.87% over the last five years. This means that any uplift the industry is enjoying, Vishay Precision Group is capable of leveraging this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Vishay Precision Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Vishay Precision Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for VPG’s future growth? Take a look at our free research report of analyst consensus for VPG’s outlook.
Financial Health: Is VPG’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 2018. 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.
