In this commentary, I will examine Matthews International Corporation’s (NASDAQ:MATW) latest earnings update (31 December 2017) and compare these figures against its performance over the past couple of years, as well as how the rest of the commercial services industry performed. As an investor, I find it beneficial to assess MATW’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. View our latest analysis for Matthews International
How MATW fared against its long-term earnings performance and its industry
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to assess many different companies in a uniform manner using the latest information. For Matthews International, its most recent earnings (trailing twelve month) is $99.2M, which, against the prior year’s figure, has increased by 39.32%. Since these values are relatively myopic, I have determined an annualized five-year figure for MATW’s earnings, which stands at $61.3M. This means that, on average, Matthews International has been able to increasingly improve its profits over the last few years as well.
What’s enabled this growth? Well, let’s take a look at whether it is merely owing to an industry uplift, or if Matthews International has seen some company-specific growth. The rise in earnings seems to be propelled by a strong top-line increase outstripping its growth rate of expenses. Though this has caused a margin contraction, it has made Matthews International more profitable. Scanning growth from a sector-level, the US commercial services industry has been growing, albeit, at a unexciting single-digit rate of 6.67% over the past twelve months, and 8.88% over the previous five years. This suggests that whatever tailwind the industry is deriving benefit from, Matthews International is capable of amplifying 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 Matthews International gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Matthews International to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for MATW’s future growth? Take a look at our free research report of analyst consensus for MATW’s outlook.
- 2. Financial Health: Is MATW’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.
- 3. 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.