Yahoo Finance Did Vista Group International Limited’s (NZSE:VGL) Recent Earnings Growth Beat The Trend?
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Vista Group International Limited (NZSE:VGL) useful as an attempt to give more color around how Vista Group International is currently performing.
See our latest analysis for Vista Group International
How VGL fared against its long-term earnings performance and its industry
VGL’s trailing twelve-month earnings (from 31 December 2018) of NZ$12m has jumped 27% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 23%, indicating the rate at which VGL is growing has accelerated. How has it been able to do this? Let’s see whether it is merely owing to industry tailwinds, or if Vista Group International has experienced some company-specific growth.
In terms of returns from investment, Vista Group International has fallen short of achieving a 20% return on equity (ROE), recording 8.2% instead. Furthermore, its return on assets (ROA) of 5.8% is below the NZ Software industry of 10%, indicating Vista Group International’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Vista Group International’s debt level, has increased over the past 3 years from 13% to 14%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 14% to 7.5% over the past 5 years.
What does this mean?
Though Vista Group International’s past data is helpful, it is only one aspect of my investment thesis. Recent positive growth isn’t always indicative of a continued optimistic outlook. There could be factors that are affecting the industry as a whole, hence the high industry growth rate over the same period of time. You should continue to research Vista Group International to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for VGL’s future growth? Take a look at our free research report of analyst consensus for VGL’s outlook.
Financial Health: Are VGL’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.
