Yahoo Finance Scientific Digital Imaging plc (LON:SDI): Has Recent Earnings Growth Beaten Long-Term Trend?
Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!
Today I will take a look at Scientific Digital Imaging plc's (LON:SDI) most recent earnings update (31 October 2018) and compare these latest figures against its performance over the past few years, as well as how the rest of the medical equipment industry performed. As an investor, I find it beneficial to assess SDI’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
See our latest analysis for Scientific Digital Imaging
How SDI fared against its long-term earnings performance and its industry
SDI's trailing twelve-month earnings (from 31 October 2018) of UK£1.7m has jumped 35% 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 58%, indicating the rate at which SDI is growing has slowed down. What could be happening here? Well, let's look at what's transpiring with margins and if the whole industry is feeling the heat.
In terms of returns from investment, Scientific Digital Imaging has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 9.2% exceeds the GB Medical Equipment industry of 9.0%, indicating Scientific Digital Imaging has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Scientific Digital Imaging’s debt level, has increased over the past 3 years from 13% to 14%.
What does this mean?
Scientific Digital Imaging's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Scientific Digital Imaging to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for SDI’s future growth? Take a look at our free research report of analyst consensus for SDI’s outlook.
Financial Health: Are SDI’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 October 2018. 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.
