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Assessing Orange S.A.'s (EPA:ORA) performance as a company requires looking at more than just a years' earnings data. Below, I will run you through a simple sense check to build perspective on how Orange is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its telecom industry peers.
Commentary On ORA's Past Performance
ORA's trailing twelve-month earnings (from 31 December 2018) of €1.7b has increased by 7.4% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -3.0%, indicating the rate at which ORA is growing has accelerated. What's enabled this growth? Let's see whether it is solely because of an industry uplift, or if Orange has experienced some company-specific growth.
In terms of returns from investment, Orange has fallen short of achieving a 20% return on equity (ROE), recording 6.5% instead. Furthermore, its return on assets (ROA) of 3.2% is below the FR Telecom industry of 7.8%, indicating Orange's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Orange’s debt level, has declined over the past 3 years from 7.6% to 7.4%.
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? You should continue to research Orange to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for ORA’s future growth? Take a look at our free research report of analyst consensus for ORA’s outlook.
- Financial Health: Are ORA’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 31 December 2018. 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 firstname.lastname@example.org. 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.