Where Addtech AB (publ.) (STO:ADDT B) Stands In Terms Of Earnings Growth Against Its Industry
Understanding Addtech AB (publ.)'s (OM:ADDT B) 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 Addtech AB (publ.) 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 Addtech AB (publ.)
How Did ADDT B's Recent Performance Stack Up Against Its Past?
ADDT B's trailing twelve-month earnings (from 30 September 2019) of kr790m has jumped 38% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 19%, indicating the rate at which ADDT B is growing has accelerated. What's enabled this growth? Well, let’s take a look at if it is solely because of an industry uplift, or if Addtech AB (publ.) has seen some company-specific growth.
In terms of returns from investment, Addtech AB (publ.) has invested its equity funds well leading to a 31% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 10% exceeds the SE Trade Distributors industry of 6.8%, indicating Addtech AB (publ.) has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Addtech AB (publ.)’s debt level, has declined over the past 3 years from 25% to 22%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 70% to 107% over the past 5 years.
What does this mean?
Though Addtech AB (publ.)'s past data is helpful, it is only one aspect of my investment thesis. While Addtech AB (publ.) has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Addtech AB (publ.) to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ADDT B’s future growth? Take a look at our free research report of analyst consensus for ADDT B’s outlook.
Financial Health: Are ADDT B’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 September 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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