Examining Raute Oyj's (HEL:RAUTE) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess RAUTE's latest performance announced on 31 December 2018 and compare these figures to its longer term trend and industry movements.
How RAUTE fared against its long-term earnings performance and its industry
RAUTE's trailing twelve-month earnings (from 31 December 2018) of €12m has jumped 27% 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 37%, indicating the rate at which RAUTE is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s going on with margins and if the rest of the industry is facing the same headwind.
In terms of returns from investment, Raute Oyj 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 12% exceeds the FI Machinery industry of 6.3%, indicating Raute Oyj has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Raute Oyj’s debt level, has increased over the past 3 years from 30% to 32%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 25% to 2.3% over the past 5 years.
What does this mean?
Raute Oyj'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 Raute Oyj gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Raute Oyj to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for RAUTE’s future growth? Take a look at our free research report of analyst consensus for RAUTE’s outlook.
- Financial Health: Are RAUTE’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 firstname.lastname@example.org. 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.