Yahoo Finance Has CompuGroup Medical Societas Europaea (FRA:COP) Improved Earnings In Recent Times?
For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on CompuGroup Medical Societas Europaea (FRA:COP) useful as an attempt to give more color around how CompuGroup Medical Societas Europaea is currently performing.
Check out our latest analysis for CompuGroup Medical Societas Europaea
Did COP beat its long-term earnings growth trend and its industry?
COP’s trailing twelve-month earnings (from 30 June 2018) of €49.3m has increased by 6.4% 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 12.7%, indicating the rate at which COP is growing has slowed down. What could be happening here? Well, let’s look at what’s going on with margins and whether the entire industry is experiencing the hit as well.
Over the last few years, revenue growth has failed to keep up which implies that CompuGroup Medical Societas Europaea’s bottom line has been propelled by unsustainable cost-reductions.
Eyeballing growth from a sector-level, the DE healthcare services industry has been relatively flat in terms of earnings growth over the past year, levelling off from a robust 19.3% over the previous five years. This growth is a median of profitable companies of 5 Healthcare Services companies in DE including Agfa-Gevaert, MeVis Medical Solutions and DocCheck. This means whatever near-term headwind the industry is experiencing, CompuGroup Medical Societas Europaea is relatively better-cushioned than its peers.
In terms of returns from investment, CompuGroup Medical Societas Europaea has invested its equity funds well leading to a 20.2% return on equity (ROE), above the sensible minimum of 20%. However, its return on assets (ROA) of 6.9% is below the DE Healthcare Services industry of 8.5%, indicating CompuGroup Medical Societas Europaea’s are utilized less efficiently. Though, its return on capital (ROC), which also accounts for CompuGroup Medical Societas Europaea’s debt level, has increased over the past 3 years from 9.7% to 15.1%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 154% to 134% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research CompuGroup Medical Societas Europaea to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for COP’s future growth? Take a look at our free research report of analyst consensus for COP’s outlook.
Financial Health: Are COP’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.
