Where Hill-Rom Holdings Inc (NYSE:HRC) Stands In Terms Of Earnings Growth Against Its Industry
For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Hill-Rom Holdings Inc (NYSE:HRC) useful as an attempt to give more color around how Hill-Rom Holdings is currently performing. Check out our latest analysis for Hill-Rom Holdings
Commentary On HRC’s Past Performance
To account for any quarterly or half-yearly updates, I 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 allows me to examine many different companies in a uniform manner using the most relevant data points. For Hill-Rom Holdings, its most recent bottom-line (trailing twelve month) is US$198.10M, which, against last year’s figure, has risen by 38.44%. Given that these figures are somewhat short-term, I’ve determined an annualized five-year value for Hill-Rom Holdings’s net income, which stands at US$103.37M This means that, generally, Hill-Rom Holdings has been able to gradually grow its earnings over the past couple of years as well.
What’s the driver of this growth? Well, let’s take a look at whether it is solely a result of industry tailwinds, or if Hill-Rom Holdings has seen some company-specific growth. In the past couple of years, Hill-Rom Holdings top-line expansion has outstripped earnings and the growth rate of expenses. Though this has led to a margin contraction, it has lessened Hill-Rom Holdings’s earnings contraction. Viewing growth from a sector-level, the US medical equipment industry has been growing its average earnings by double-digit 11.06% in the previous twelve months, and 10.37% over the last five years. This means whatever uplift the industry is enjoying, Hill-Rom Holdings is capable of amplifying this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Hill-Rom Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Hill-Rom Holdings to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for HRC’s future growth? Take a look at our free research report of analyst consensus for HRC’s outlook.
2. Financial Health: Is HRC’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 31 December 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.
