Does Mensch und Maschine Software SE's (ETR:MUM) Recent Track Record Look Strong?
Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Mensch und Maschine Software SE's (XTRA:MUM) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
View our latest analysis for Mensch und Maschine Software
Did MUM beat its long-term earnings growth trend and its industry?
MUM's trailing twelve-month earnings (from 31 December 2019) of €17m has jumped 43% 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 MUM is growing has accelerated. What's the driver of this growth? Let's see if it is merely attributable to an industry uplift, or if Mensch und Maschine Software has seen some company-specific growth.
In terms of returns from investment, Mensch und Maschine Software has invested its equity funds well leading to a 25% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 11% exceeds the DE Software industry of 6.3%, indicating Mensch und Maschine Software has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Mensch und Maschine Software’s debt level, has increased over the past 3 years from 18% to 25%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 106% to 33% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Mensch und Maschine Software to get a more holistic view of the stock by looking at:
Financial Health: Are MUM’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.
Valuation: What is MUM worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MUM is currently mispriced by the market.
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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