Want To Invest In Gestamp Automoción, S.A. (BME:GEST)? Here's How It Performed Lately
Examining Gestamp Automoción, S.A.'s (BME:GEST) 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 GEST's latest performance announced on 31 December 2019 and compare these figures to its longer term trend and industry movements.
See our latest analysis for Gestamp Automoción
Despite a decline, did GEST underperform the long-term trend and the industry?
GEST's trailing twelve-month earnings (from 31 December 2019) of €212m has declined by -18% 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 11%, indicating the rate at which GEST is growing has slowed down. Why is this? Well, let's look at what's occurring with margins and whether the entire industry is facing the same headwind.
In terms of returns from investment, Gestamp Automoción has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 4.3% is below the ES Auto Components industry of 4.6%, indicating Gestamp Automoción's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Gestamp Automoción’s debt level, has declined over the past 3 years from 11% to 7.9%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 117% to 130% over the past 5 years.
What does this mean?
Though Gestamp Automoción's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors impacting its business. I recommend you continue to research Gestamp Automoción to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for GEST’s future growth? Take a look at our free research report of analyst consensus for GEST’s outlook.
Financial Health: Are GEST’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 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
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