Does ISS A/S's (CPH:ISS) Past Performance Indicate A Weaker Future?
Analyzing ISS A/S's (CPSE:ISS) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess ISS's recent performance announced on 31 December 2019 and compare these figures to its long-term trend and industry movements.
See our latest analysis for ISS
How Well Did ISS Perform?
ISS's trailing twelve-month earnings (from 31 December 2019) of ø1.2b has declined by -4.6% 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 -4.5%, indicating the rate at which ISS is growing has slowed down. Why could this be happening? Let's examine what's going on with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, ISS has fallen short of achieving a 20% return on equity (ROE), recording 9.4% instead. Furthermore, its return on assets (ROA) of 3.3% is below the DK Commercial Services industry of 4.9%, indicating ISS's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for ISS’s debt level, has declined over the past 3 years from 12% to 10%.
What does this mean?
ISS's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Typically companies that endure a drawn out period of decline in earnings are going through some sort of reinvestment phase Although, if the entire industry is struggling to grow over time, it may be a indicator of a structural shift, which makes ISS and its peers a riskier investment. You should continue to research ISS to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ISS’s future growth? Take a look at our free research report of analyst consensus for ISS’s outlook.
Financial Health: Are ISS’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 December 2019. This may not be consistent with full year annual report figures.
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