Understanding how Georg Fischer AG (VTX:FI-N) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how Georg Fischer is doing by comparing its latest earnings with its long-term trend as well as the performance of its machinery industry peers.
Did FI-N perform worse than its track record and industry?
FI-N's trailing twelve-month earnings (from 30 June 2019) of CHF232m has declined by -18% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 11%, indicating the rate at which FI-N is growing has slowed down. What could be happening here? Let's examine what's going on with margins and whether the rest of the industry is facing the same headwind.
In terms of returns from investment, Georg Fischer has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 7.6% exceeds the CH Machinery industry of 5.3%, indicating Georg Fischer has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Georg Fischer’s debt level, has declined over the past 3 years from 15% to 14%.
What does this mean?
Georg Fischer's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. I suggest you continue to research Georg Fischer to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for FI-N’s future growth? Take a look at our free research report of analyst consensus for FI-N’s outlook.
- Financial Health: Are FI-N’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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.