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Where LCI Industries's (NYSE:LCII) Earnings Growth Stands Against Its Industry

Simply Wall St

Analyzing LCI Industries's (NYSE:LCII) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess LCII's recent performance announced on 31 March 2019 and compare these figures to its long-term trend and industry movements.

Check out our latest analysis for LCI Industries

How Did LCII's Recent Performance Stack Up Against Its Past?

LCII's trailing twelve-month earnings (from 31 March 2019) of US$136m has declined by -1.1% 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 20%, indicating the rate at which LCII is growing has slowed down. Why is this? Let's examine what's going on with margins and whether the rest of the industry is feeling the heat.

NYSE:LCII Income Statement, July 22nd 2019

In terms of returns from investment, LCI Industries has fallen short of achieving a 20% return on equity (ROE), recording 19% instead. However, its return on assets (ROA) of 11% exceeds the US Auto Components industry of 7.2%, indicating LCI Industries has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for LCI Industries’s debt level, has declined over the past 3 years from 26% to 17%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 3.0% to 40% over the past 5 years.

What does this mean?

LCI Industries'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 impacting its business. I suggest you continue to research LCI Industries to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for LCII’s future growth? Take a look at our free research report of analyst consensus for LCII’s outlook.
  2. Financial Health: Are LCII’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 March 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 editorial-team@simplywallst.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.