Assessing Horizon Bancorp’s (NASDAQ:HBNC) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess HBNC’s recent performance announced on 31 December 2017 and evaluate these figures to its longer term trend and industry movements. View our latest analysis for Horizon Bancorp
How Well Did HBNC Perform?
I prefer to use the ‘latest twelve-month’ data, 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 enables me to assess different stocks on a similar basis, using the most relevant data points. For Horizon Bancorp, its most recent bottom-line (trailing twelve month) is US$33.12M, which, relative to the prior year’s level, has moved up by 38.74%. Given that these values may be somewhat short-term thinking, I have estimated an annualized five-year value for HBNC’s earnings, which stands at US$19.96M This shows that, on average, Horizon Bancorp has been able to increasingly raise its bottom line over the last few years as well.
What’s enabled this growth? Let’s take a look at whether it is solely because of industry tailwinds, or if Horizon Bancorp has experienced some company-specific growth. In the last couple of years, Horizon Bancorp expanded 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 3.32% in the prior year, and 8.10% over the last five years. This means that any recent headwind the industry is experiencing, the impact on Horizon Bancorp has been softer relative to its peers.
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 Horizon Bancorp gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Horizon Bancorp to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for HBNC’s future growth? Take a look at our free research report of analyst consensus for HBNC’s outlook.
- 2. Financial Health: Is HBNC’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.