Does AT & S Austria Technologie & Systemtechnik Aktiengesellschaft's (VIE:ATS) Past Performance Indicate A Weaker Future?

Simply Wall St

In this commentary, I will examine AT & S Austria Technologie & Systemtechnik Aktiengesellschaft's (VIE:ATS) latest earnings update (30 June 2019) and compare these figures against its performance over the past couple of years, as well as how the rest of the electronic industry performed. As an investor, I find it beneficial to assess ATS’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.

See our latest analysis for AT & S Austria Technologie & Systemtechnik

Was ATS's weak performance lately a part of a long-term decline?

ATS's trailing twelve-month earnings (from 30 June 2019) of €61m has declined by -19% 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 3.9%, indicating the rate at which ATS is growing has slowed down. What could be happening here? Let's examine what's transpiring with margins and whether the whole industry is experiencing the hit as well.

WBAG:ATS Income Statement, September 19th 2019

In terms of returns from investment, AT & S Austria Technologie & Systemtechnik has fallen short of achieving a 20% return on equity (ROE), recording 8.8% instead. Furthermore, its return on assets (ROA) of 4.1% is below the AT Electronic industry of 6.3%, indicating AT & S Austria Technologie & Systemtechnik's are utilized less efficiently. However, its return on capital (ROC), which also accounts for AT & S Austria Technologie & Systemtechnik’s debt level, has increased over the past 3 years from 4.2% to 5.8%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 98% to 98% over the past 5 years.

What does this mean?

AT & S Austria Technologie & Systemtechnik's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I recommend you continue to research AT & S Austria Technologie & Systemtechnik to get a better picture of the stock by looking at:

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

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.