Does Proto Labs, Inc.’s (NYSE:PRLB) 48% Earnings Growth Reflect The Long-Term Trend?
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Understanding Proto Labs, Inc.’s (NYSE:PRLB) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Proto Labs is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period.
Check out our latest analysis for Proto Labs
How Well Did PRLB Perform?
PRLB’s trailing twelve-month earnings (from 31 December 2018) of US$77m has jumped 48% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 12%, indicating the rate at which PRLB is growing has accelerated. What’s the driver of this growth? Let’s take a look at if it is solely attributable to an industry uplift, or if Proto Labs has seen some company-specific growth.
In terms of returns from investment, Proto Labs has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 12% exceeds the US Machinery industry of 6.7%, indicating Proto Labs has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Proto Labs’s debt level, has declined over the past 3 years from 20% to 16%.
What does this mean?
Though Proto Labs’s past data is helpful, it is only one aspect of my investment thesis. While Proto Labs has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Proto Labs to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for PRLB’s future growth? Take a look at our free research report of analyst consensus for PRLB’s outlook.
Financial Health: Are PRLB’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 2018. 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.
