Yahoo Finance Does NCC Group plc's (LON:NCC) Recent Track Record Look Strong?
After looking at NCC Group plc's (LON:NCC) latest earnings announcement (31 May 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
See our latest analysis for NCC Group
Did NCC's recent earnings growth beat the long-term trend and the industry?
NCC's trailing twelve-month earnings (from 31 May 2019) of UK£14m has increased by 8.9% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -24%, indicating the rate at which NCC is growing has accelerated. What's the driver of this growth? Let's see if it is only due to industry tailwinds, or if NCC Group has seen some company-specific growth.
In terms of returns from investment, NCC Group has fallen short of achieving a 20% return on equity (ROE), recording 6.4% instead. Furthermore, its return on assets (ROA) of 4.4% is below the GB IT industry of 7.3%, indicating NCC Group's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for NCC Group’s debt level, has declined over the past 3 years from 9.2% to 8.6%.
What does this mean?
Though NCC Group's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as NCC Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research NCC Group to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for NCC’s future growth? Take a look at our free research report of analyst consensus for NCC’s outlook.
Financial Health: Are NCC’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 May 2019. This may not be consistent with full year annual report figures.
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