For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Community Trust Bancorp Inc (NASDAQ:CTBI) useful as an attempt to give more color around how Community Trust Bancorp is currently performing. See our latest analysis for Community Trust Bancorp
Commentary On CTBI’s Past Performance
For the purpose of this commentary, I like to 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 technique enables me to analyze different companies on a more comparable basis, using the most relevant data points. For Community Trust Bancorp, its most recent earnings (trailing twelve month) is $48.4M, which, against last year’s figure, has increased by a relatively soft 2.32%. Since these figures may be relatively myopic, I have calculated an annualized five-year value for CTBI’s net income, which stands at $44.0M. This means that, on average, Community Trust Bancorp has been able to increasingly improve its profits over the last few years as well.
What’s the driver of this growth? Let’s take a look at whether it is merely attributable to an industry uplift, or if Community Trust Bancorp has seen some company-specific growth. Over the past couple of years, Community Trust Bancorp grew its bottom line faster than revenue by effectively controlling its costs. This has caused a margin expansion and profitability over time. Scanning growth from a sector-level, the US banks industry has been growing, albeit, at a subdued single-digit rate of 9.87% over the prior twelve months, and 8.52% over the previous five years. This means that any uplift the industry is deriving benefit from, Community Trust Bancorp has not been able to reap as much as its industry peers.
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 Community Trust Bancorp to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for CTBI’s future growth? Take a look at our free research report of analyst consensus for CTBI’s outlook.
2. Financial Health: Is CTBI’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 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.