Assessing Proto Labs, Inc.'s (NYSE:PRLB) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess PRLB's latest performance announced on 30 June 2019 and evaluate these figures to its historical trend and industry movements.
Were PRLB's earnings stronger than its past performances and the industry?
PRLB's trailing twelve-month earnings (from 30 June 2019) of US$72m has jumped 13% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 13%, indicating the rate at which PRLB is growing has slowed down. To understand what's happening, let's examine what's transpiring with margins and if the whole industry is feeling the heat.
In terms of returns from investment, Proto Labs has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 11% exceeds the US Machinery industry of 7.5%, indicating Proto Labs has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Proto Labs’s debt level, has declined over the past 3 years from 18% to 14%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Proto Labs to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PRLB’s future growth? Take a look at our free research report of analyst consensus for PRLB’s outlook.
- Financial Health: Are PRLB’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 30 June 2019. This may not be consistent with full year annual report figures.
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