Where Epsilon Net S.A. (ATH:EPSIL) Stands In Terms Of Earnings Growth Against Its Industry

Simply Wall St

Examining how Epsilon Net S.A. (ATH:EPSIL) is performing as a company requires looking at more than just a years' earnings. Below, I will run you through a simple sense check to build perspective on how Epsilon Net is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its software industry peers.

View our latest analysis for Epsilon Net

Did EPSIL beat its long-term earnings growth trend and its industry?

EPSIL's trailing twelve-month earnings (from 31 December 2018) of €818k has jumped 17% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 28%, indicating the rate at which EPSIL is growing has slowed down. To understand what's happening, let’s take a look at what’s going on with margins and if the rest of the industry is facing the same headwind.

ATSE:EPSIL Income Statement, August 19th 2019

In terms of returns from investment, Epsilon Net has fallen short of achieving a 20% return on equity (ROE), recording 8.5% instead. Furthermore, its return on assets (ROA) of 4.1% is below the GR Software industry of 4.2%, indicating Epsilon Net's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Epsilon Net’s debt level, has increased over the past 3 years from 5.7% to 7.7%.

What does this mean?

Epsilon Net's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Epsilon Net gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Epsilon Net to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for EPSIL’s future growth? Take a look at our free research report of analyst consensus for EPSIL’s outlook.
  2. Financial Health: Are EPSIL’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.
  3. 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.