Want To Invest In Regal Entertainment Group (NYSE:RGC)? Here’s How It Performed Lately
Today I will take a look at Regal Entertainment Group’s (NYSE:RGC) most recent earnings update (30 September 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the media industry performed. As an investor, I find it beneficial to assess RGC’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 Regal Entertainment Group
Was RGC’s recent earnings decline indicative of a tough track record?
For the purpose of this commentary, I like to 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 blend allows me to analyze many different companies on a more comparable basis, using the most relevant data points. For Regal Entertainment Group, its most recent bottom-line (trailing twelve month) is US$137.30M, which, against the prior year’s figure, has declined by -19.94%. Given that these values may be fairly nearsighted, I have computed an annualized five-year value for RGC’s earnings, which stands at US$126.30M This means even though earnings declined from the previous year, in the long run, Regal Entertainment Group’s profits have been growing on average.
What’s the driver of this growth? Well, let’s take a look at if it is solely because of industry tailwinds, or if Regal Entertainment Group has experienced some company-specific growth. In the last couple of years, Regal Entertainment Group grew its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US media industry has been growing its average earnings by double-digit 25.75% over the previous year, and a less exciting 8.09% over the previous five years. This means that whatever uplift the industry is benefiting from, Regal Entertainment Group has not been able to reap as much as its industry peers.
What does this mean?
Though Regal Entertainment Group’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 affecting its business. I suggest you continue to research Regal Entertainment Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for RGC’s future growth? Take a look at our free research report of analyst consensus for RGC’s outlook.
Financial Health: Is RGC’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 September 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.
