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Understanding Trio-Tech International's (AMEX:TRT) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Trio-Tech International is doing by evaluating its latest earnings with its longer term trend as well as its industry peers' performance over the same period.
Did TRT's recent earnings growth beat the long-term trend and the industry?
TRT's trailing twelve-month earnings (from 30 June 2019) of US$1.5m has jumped 29% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 25%, indicating the rate at which TRT is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is merely owing to an industry uplift, or if Trio-Tech International has experienced some company-specific growth.
In terms of returns from investment, Trio-Tech International has fallen short of achieving a 20% return on equity (ROE), recording 5.8% instead. Furthermore, its return on assets (ROA) of 4.8% is below the US Semiconductor industry of 7.9%, indicating Trio-Tech International's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Trio-Tech International’s debt level, has declined over the past 3 years from 6.2% to 2.8%.
What does this mean?
Trio-Tech International'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 Trio-Tech International gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Trio-Tech International to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TRT’s future growth? Take a look at our free research report of analyst consensus for TRT’s outlook.
Financial Health: Are TRT’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 30 June 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 email@example.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.