Did Fox Factory Holding Corp.'s (NASDAQ:FOXF) Recent Earnings Growth Beat The Trend?

In this article:

When Fox Factory Holding Corp.'s (NasdaqGS:FOXF) announced its latest earnings (27 September 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Fox Factory Holding's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not FOXF actually performed well. Below is a quick commentary on how I see FOXF has performed.

See our latest analysis for Fox Factory Holding

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

FOXF's trailing twelve-month earnings (from 27 September 2019) of US$91m has jumped 36% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 30%, indicating the rate at which FOXF is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is only attributable to an industry uplift, or if Fox Factory Holding has experienced some company-specific growth.

NasdaqGS:FOXF Income Statement, November 11th 2019
NasdaqGS:FOXF Income Statement, November 11th 2019

In terms of returns from investment, Fox Factory Holding has invested its equity funds well leading to a 22% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 16% exceeds the US Auto Components industry of 6.2%, indicating Fox Factory Holding has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Fox Factory Holding’s debt level, has increased over the past 3 years from 20% to 22%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 25% to 18% over the past 5 years.

What does this mean?

Fox Factory Holding's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Fox Factory Holding 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 Fox Factory Holding to get a better picture of the stock by looking at:

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

  2. Financial Health: Are FOXF’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 27 September 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 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. Thank you for reading.

Advertisement