Yahoo Finance How Does boohoo group plc's (LON:BOO) Earnings Growth Stack Up Against Industry Performance?
Measuring boohoo group plc's (LON:BOO) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess BOO's recent performance announced on 28 February 2019 and weigh these figures against its long-term trend and industry movements.
View our latest analysis for boohoo group
Commentary On BOO's Past Performance
BOO's trailing twelve-month earnings (from 28 February 2019) of UK£38m has jumped 19% 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 33%, indicating the rate at which BOO is growing has slowed down. Why could this be happening? Well, let's look at what's occurring with margins and if the whole industry is experiencing the hit as well.
In terms of returns from investment, boohoo group has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 8.3% exceeds the GB Online Retail industry of 7.4%, indicating boohoo group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for boohoo group’s debt level, has increased over the past 3 years from 20% to 24%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 26% to 2.6% over the past 5 years.
What does this mean?
Though boohoo group's past data is helpful, it is only one aspect of my investment thesis. 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 boohoo group to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for BOO’s future growth? Take a look at our free research report of analyst consensus for BOO’s outlook.
Financial Health: Are BOO’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 28 February 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.
