Today I will examine USANA Health Sciences, Inc.'s (NYSE:USNA) latest earnings update (29 June 2019) and compare these figures against its performance over the past couple of years, in addition to how the rest of USNA's industry performed. As a long-term investor, I find it useful to analyze the company's trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time.
Could USNA beat the long-term trend and outperform its industry?
USNA's trailing twelve-month earnings (from 29 June 2019) of US$109m has jumped 35% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 5.3%, indicating the rate at which USNA is growing has accelerated. What's enabled this growth? Let's see if it is merely owing to industry tailwinds, or if USANA Health Sciences has experienced some company-specific growth.
In terms of returns from investment, USANA Health Sciences has invested its equity funds well leading to a 28% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 19% exceeds the US Personal Products industry of 10%, indicating USANA Health Sciences has used its assets more efficiently. However, its return on capital (ROC), which also accounts for USANA Health Sciences’s debt level, has declined over the past 3 years from 51% to 40%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While USANA Health Sciences has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research USANA Health Sciences to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for USNA’s future growth? Take a look at our free research report of analyst consensus for USNA’s outlook.
- Financial Health: Are USNA’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 29 June 2019. This may not be consistent with full year annual report figures.
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