When NRJ Group SA (ENXTPA:NRG) released its most recent earnings update (31 December 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were NRJ Group's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not NRG actually performed well. Below is a quick commentary on how I see NRG has performed.

View our latest analysis for NRJ Group

Commentary On NRG's Past Performance

NRG's trailing twelve-month earnings (from 31 December 2019) of €22m has declined by -1.2% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 3.4%, indicating the rate at which NRG is growing has slowed down. Why is this? Well, let’s take a look at what’s occurring with margins and if the entire industry is feeling the heat.

In terms of returns from investment, NRJ Group has fallen short of achieving a 20% return on equity (ROE), recording 3.6% instead. Furthermore, its return on assets (ROA) of 2.6% is below the FR Media industry of 4.8%, indicating NRJ Group's are utilized less efficiently. However, its return on capital (ROC), which also accounts for NRJ Group’s debt level, has increased over the past 3 years from 2.4% to 4.2%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 2.9% to 2.6% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. I recommend you continue to research NRJ Group to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for NRG’s future growth? Take a look at our free research report of analyst consensus for NRG’s outlook.

2. Financial Health: Are NRG’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 31 December 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.

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