Yahoo Finance Was Rottneros AB (publ)'s (STO:RROS) Earnings Decline Part Of A Broader Industry Downturn?
Measuring Rottneros AB (publ)'s (OM:RROS) 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 RROS's recent performance announced on 31 December 2019 and weigh these figures against its long-term trend and industry movements.
See our latest analysis for Rottneros
Did RROS perform worse than its track record and industry?
RROS's trailing twelve-month earnings (from 31 December 2019) of kr194m has declined by -12% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 2.8%, indicating the rate at which RROS is growing has slowed down. What could be happening here? Well, let's look at what's transpiring with margins and whether the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Rottneros has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 9.1% exceeds the SE Forestry industry of 5.1%, indicating Rottneros has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Rottneros’s debt level, has increased over the past 3 years from 12% to 14%.
What does this mean?
Rottneros's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors affecting its business. You should continue to research Rottneros to get a more holistic view of the stock by looking at:
Financial Health: Are RROS’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.
Valuation: What is RROS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether RROS is currently mispriced by the market.
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 2019. This may not be consistent with full year annual report figures.
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.
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