Understanding The Greenbrier Companies Inc’s (NYSE:GBX) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Greenbrier Companies is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period.
Were GBX’s earnings stronger than its past performances and the industry?
GBX’s trailing twelve-month earnings (from 31 August 2018) of US$152m has jumped 31% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 16%, indicating the rate at which GBX is growing has accelerated. What’s the driver of this growth? Let’s see if it is only owing to an industry uplift, or if Greenbrier Companies has seen some company-specific growth.
In terms of returns from investment, Greenbrier Companies has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. However, its return on assets (ROA) of 7.4% exceeds the US Machinery industry of 6.6%, indicating Greenbrier Companies has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Greenbrier Companies’s debt level, has declined over the past 3 years from 30% to 10%.
What does this mean?
Though Greenbrier Companies’s past data is helpful, it is only one aspect of my investment thesis. While Greenbrier Companies has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Greenbrier Companies to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for GBX’s future growth? Take a look at our free research report of analyst consensus for GBX’s outlook.
- Financial Health: Are GBX’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 August 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at firstname.lastname@example.org.