Yahoo Finance Does Atos SE's (EPA:ATO) 4.8% Earnings Growth Reflect The Long-Term Trend?
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Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Atos SE's (EPA:ATO) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
View our latest analysis for Atos
Could ATO beat the long-term trend and outperform its industry?
ATO's trailing twelve-month earnings (from 31 December 2018) of €630m has increased by 4.8% 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 21%, indicating the rate at which ATO is growing has slowed down. To understand what's happening, let’s take a look at what’s transpiring with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Atos has fallen short of achieving a 20% return on equity (ROE), recording 8.7% instead. Furthermore, its return on assets (ROA) of 3.1% is below the FR IT industry of 5.3%, indicating Atos's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Atos’s debt level, has declined over the past 3 years from 11% to 7.5%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 14% to 67% 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? You should continue to research Atos to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ATO’s future growth? Take a look at our free research report of analyst consensus for ATO’s outlook.
Financial Health: Are ATO’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.
