Measuring Renasant Corporation’s (NASDAQ:RNST) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess RNST’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for Renasant
Did RNST beat its long-term earnings growth trend and its industry?
I look at data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to analyze many different companies on a more comparable basis, using the most relevant data points. For Renasant, the most recent earnings is $99.3M, which compared to the prior year’s figure, has risen by 12.27%. Since these values are relatively nearsighted, I’ve calculated an annualized five-year value for Renasant’s net income, which stands at $52.0M. This shows that, on average, Renasant has been able to consistently grow its bottom line over the past few years as well.
How has it been able to do this? Let’s take a look at if it is merely attributable to industry tailwinds, or if Renasant has experienced some company-specific growth. In the last few years, Renasant grew its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Viewing growth from a sector-level, the US banks industry has been growing, albeit, at a muted single-digit rate of 9.80% in the previous twelve months, and 8.99% over the past five years. This shows that whatever uplift the industry is profiting from, Renasant is capable of leveraging this to its advantage.
What does this mean?
Renasant’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Renasant has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Renasant to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for RNST’s future growth? Take a look at our free research report of analyst consensus for RNST’s outlook.
2. Financial Health: Is RNST’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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.