Yahoo Finance Should You Be Concerned With Vonovia SE's (ETR:VNA) -3.1% Earnings Drop?
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Examining Vonovia SE's (ETR:VNA) 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 VNA's latest performance announced on 31 March 2019 and compare these figures to its longer term trend and industry movements.
See our latest analysis for Vonovia
Despite a decline, did VNA underperform the long-term trend and the industry?
VNA's trailing twelve-month earnings (from 31 March 2019) of €2.3b has declined by -3.1% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 42%, indicating the rate at which VNA is growing has slowed down. Why is this? Well, let's look at what's transpiring with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Vonovia has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. Furthermore, its return on assets (ROA) of 5.5% is below the DE Real Estate industry of 5.6%, indicating Vonovia's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Vonovia’s debt level, has increased over the past 3 years from 3.0% to 3.2%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 136% to 106% over the past 5 years.
What does this mean?
Though Vonovia's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. You should continue to research Vonovia to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for VNA’s future growth? Take a look at our free research report of analyst consensus for VNA’s outlook.
Financial Health: Are VNA’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 March 2019. 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.
