Where Soup Restaurant Group Limited (SGX:5KI) Stands In Terms Of Earnings Growth Against Its Industry
After looking at Soup Restaurant Group Limited's (SGX:5KI) latest earnings announcement (31 December 2018), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Soup Restaurant Group's performance has been impacted by industry movements. In this article I briefly touch on my key findings.
See our latest analysis for Soup Restaurant Group
Did 5KI's recent earnings growth beat the long-term trend and the industry?
5KI's trailing twelve-month earnings (from 31 December 2018) of S$2.2m has jumped 12% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 26%, indicating the rate at which 5KI is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, Soup Restaurant Group has fallen short of achieving a 20% return on equity (ROE), recording 20% instead. However, its return on assets (ROA) of 13% exceeds the SG Hospitality industry of 4.0%, indicating Soup Restaurant Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Soup Restaurant Group’s debt level, has increased over the past 3 years from 7.5% to 19%.
What does this mean?
Soup Restaurant Group's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Soup Restaurant Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Soup Restaurant Group to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 5KI’s future growth? Take a look at our free research report of analyst consensus for 5KI’s outlook.
Financial Health: Are 5KI’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 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.
