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When Lagercrantz Group AB (publ) (STO:LAGR B) released its most recent earnings update (31 March 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Lagercrantz Group performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see LAGR B has performed.
Did LAGR B beat its long-term earnings growth trend and its industry?
LAGR B's trailing twelve-month earnings (from 31 March 2019) of kr342m has jumped 20% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 12%, indicating the rate at which LAGR B is growing has accelerated. What's enabled this growth? Let's take a look at if it is solely a result of industry tailwinds, or if Lagercrantz Group has experienced some company-specific growth.
In terms of returns from investment, Lagercrantz Group has invested its equity funds well leading to a 23% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 9.3% exceeds the SE Electronic industry of 7.4%, indicating Lagercrantz Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Lagercrantz Group’s debt level, has increased over the past 3 years from 20% to 21%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Lagercrantz Group has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Lagercrantz Group to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for LAGR B’s future growth? Take a look at our free research report of analyst consensus for LAGR B’s outlook.
- Financial Health: Are LAGR B’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 March 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 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.