Yahoo Finance Has Amplifon SpA’s (BIT:AMP) Earnings Momentum Changed Recently?
For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Amplifon SpA’s (BIT:AMP) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.
See our latest analysis for Amplifon
Did AMP beat its long-term earnings growth trend and its industry?
AMP’s trailing twelve-month earnings (from 30 June 2018) of €109.6m has jumped 52.1% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 17.6%, indicating the rate at which AMP is growing has accelerated. What’s enabled this growth? Well, let’s take a look at if it is solely due to an industry uplift, or if Amplifon has seen some company-specific growth.
In the past few years, Amplifon increased its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the IT healthcare industry has been growing its average earnings by double-digit 14.4% in the previous year, and 17.5% over the past five years. Since the Healthcare sector in IT is relatively small, I’ve included similar companies in the wider region in order to get a better idea of the growth, which is a median of profitable companies of companies such as Servizi Italia, Health Italia and Bomi Italia. This means that whatever tailwind the industry is enjoying, Amplifon is capable of amplifying this to its advantage.
In terms of returns from investment, Amplifon has fallen short of achieving a 20% return on equity (ROE), recording 19.9% instead. However, its return on assets (ROA) of 7.7% exceeds the IT Healthcare industry of 4.8%, indicating Amplifon has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Amplifon’s debt level, has increased over the past 3 years from 9.1% to 13.6%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 103% to 99.1% over the past 5 years.
What does this mean?
Amplifon’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Amplifon 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 Amplifon to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for AMP’s future growth? Take a look at our free research report of analyst consensus for AMP’s outlook.
Financial Health: Are AMP’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 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
