When Jumbo S.A.'s (ATSE:BELA) announced its latest earnings (30 June 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Jumbo's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not BELA actually performed well. Below is a quick commentary on how I see BELA has performed.
View our latest analysis for Jumbo
Did BELA's recent earnings growth beat the long-term trend and the industry?
BELA's trailing twelve-month earnings (from 30 June 2019) of €163m has increased by 7.8% 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 10%, indicating the rate at which BELA is growing has slowed down. To understand what's happening, let's examine what's occurring with margins and if the entire industry is facing the same headwind.
In terms of returns from investment, Jumbo has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 11% exceeds the GR Specialty Retail industry of 3.3%, indicating Jumbo has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Jumbo's debt level, has increased over the past 3 years from 14% to 15%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 22% to 17% over the past 5 years.
What does this mean?
Jumbo'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 Jumbo gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Jumbo to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for BELA's future growth? Take a look at our free research report of analyst consensus for BELA's outlook.
Financial Health: Are BELA'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 June 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 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.
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