Yahoo Finance Eurofins Scientific SE (EPA:ERF): Has Recent Earnings Growth Beaten Long-Term Trend?
When Eurofins Scientific SE (ENXTPA:ERF) released its most recent earnings update (31 December 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Eurofins Scientific performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see ERF has performed. Check out our latest analysis for Eurofins Scientific
How Did ERF’s Recent Performance Stack Up Against Its Past?
I look at data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This enables me to examine different companies on a similar basis, using the most relevant data points. For Eurofins Scientific, its most recent trailing-twelve-month earnings is €179.44M, which, in comparison to the previous year’s figure, has increased by 29.68%. Given that these figures may be somewhat short-term, I have estimated an annualized five-year value for ERF’s net income, which stands at €81.45M This shows that, generally, Eurofins Scientific has been able to steadily improve its net income over the past few years as well.
What’s enabled this growth? Let’s take a look at whether it is solely a result of industry tailwinds, or if Eurofins Scientific has seen some company-specific growth. The hike in earnings seems to be bolstered by a strong top-line increase outstripping its growth rate of costs. Though this resulted in a margin contraction, it has made Eurofins Scientific more profitable. Eyeballing growth from a sector-level, the FR life sciences industry has been growing its average earnings by double-digit 29.68% over the past year, and 22.10% over the previous five years.
What does this mean?
Though Eurofins Scientific’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Eurofins Scientific gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Eurofins Scientific to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ERF’s future growth? Take a look at our free research report of analyst consensus for ERF’s outlook.
Financial Health: Is ERF’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 2017. 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.
