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Where WiseTech Global Limited (ASX:WTC) Stands In Terms Of Earnings Growth Against Its Industry

Simply Wall St

Examining WiseTech Global Limited's (ASX:WTC) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess WTC's latest performance announced on 30 June 2019 and weigh these figures against its longer term trend and industry movements.

View our latest analysis for WiseTech Global

Did WTC's recent earnings growth beat the long-term trend and the industry?

WTC's trailing twelve-month earnings (from 30 June 2019) of AU$54m has jumped 33% 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 45%, indicating the rate at which WTC is growing has slowed down. What could be happening here? Well, let’s take a look at what’s transpiring with margins and whether the whole industry is facing the same headwind.

ASX:WTC Income Statement, January 16th 2020

In terms of returns from investment, WiseTech Global has fallen short of achieving a 20% return on equity (ROE), recording 7.1% instead. Furthermore, its return on assets (ROA) of 5.3% is below the AU Software industry of 8.6%, indicating WiseTech Global's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for WiseTech Global’s debt level, has declined over the past 3 years from 9.0% to 8.8%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as WiseTech Global gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research WiseTech Global to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for WTC’s future growth? Take a look at our free research report of analyst consensus for WTC’s outlook.
  2. Financial Health: Are WTC’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 30 June 2019. This may not be consistent with full year annual report figures.

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.

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. Thank you for reading.