Yahoo Finance Does Oclaro Inc’s (NASDAQ:OCLR) Recent Track Record Look Strong?
Analyzing Oclaro Inc’s (NASDAQ:OCLR) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess OCLR’s recent performance announced on 31 March 2018 and compare these figures to its long-term trend and industry movements. View out our latest analysis for Oclaro
Did OCLR beat its long-term earnings growth trend and its industry?
OCLR recently turned a profit of US$112.06m (most recent trailing twelve-months) compared to its average loss of -US$30.33m over the past five years.
Over the past couple of years, Oclaro expanded its bottom line faster than revenue by successfully controlling its costs. This resulted in a margin expansion and profitability over time. Viewing growth from a sector-level, the US communications industry has been growing its average earnings by double-digit 13.80% in the prior twelve months, and a less exciting 6.43% over the past half a decade. This means that whatever uplift the industry is enjoying, Oclaro is able to leverage this to its advantage.
In terms of returns from investment, Oclaro has not invested its equity funds well, leading to a 19.25% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 15.45% exceeds the US Communications industry of 4.37%, indicating Oclaro has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Oclaro’s debt level, has increased over the past 3 years from -22.09% to 16.49%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 50.12% to 0.61% over the past 5 years.
What does this mean?
Oclaro’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Oclaro gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Oclaro to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for OCLR’s future growth? Take a look at our free research report of analyst consensus for OCLR’s outlook.
Financial Health: Is OCLR’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 2018. This may not be consistent with full year annual report figures.
To help readers see pass 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.
