Does Gestamp Automoción, S.A.'s (BME:GEST) Past Performance Indicate A Weaker Future?
Measuring Gestamp Automoción, S.A.'s (BME:GEST) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess GEST's recent performance announced on 30 June 2019 and compare these figures to its historical trend and industry movements.
See our latest analysis for Gestamp Automoción
How Did GEST's Recent Performance Stack Up Against Its Past?
GEST's trailing twelve-month earnings (from 30 June 2019) of €222m has declined by -14% 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 15%, indicating the rate at which GEST is growing has slowed down. Why is this? Well, let’s take a look at what’s going on with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, Gestamp Automoción has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 4.1% is below the ES Auto Components industry of 5.1%, indicating Gestamp Automoción's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Gestamp Automoción’s debt level, has declined over the past 3 years from 10% to 7.7%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 120% to 136% over the past 5 years.
What does this mean?
Gestamp Automoción'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 unpredictable earnings, can have many factors influencing its business. I suggest you continue to research Gestamp Automoción to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for GEST’s future growth? Take a look at our free research report of analyst consensus for GEST’s outlook.
Financial Health: Are GEST’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 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.
