Yahoo Finance Tamedia AG (VTX:TAMN): Has Recent Earnings Growth Beaten Long-Term Trend?
Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Tamedia AG’s (VTX:TAMN) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Check out our latest analysis for Tamedia
How Well Did TAMN Perform?
TAMN’s trailing twelve-month earnings (from 31 December 2017) of CHF146.9m has jumped 40.3% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.6%, indicating the rate at which TAMN is growing has accelerated. How has it been able to do this? Let’s take a look at whether it is merely due to industry tailwinds, or if Tamedia has experienced some company-specific growth.
In the last few years, Tamedia increased bottom-line, while its top-line fell, by effectively controlling its costs. This has caused to a margin expansion and profitability over time. Eyeballing growth from a sector-level, the CH media industry has been growing its average earnings by double-digit 34.1% in the prior twelve months, and a more subdued 8.9% over the past five years. This growth is a median of profitable companies of 14 Media companies in CH including APG|SGA, RTL Group and ProSiebenSat.1 Media. This shows that any tailwind the industry is profiting from, Tamedia is capable of amplifying this to its advantage.
In terms of returns from investment, Tamedia has fallen short of achieving a 20% return on equity (ROE), recording 8.6% instead. Furthermore, its return on assets (ROA) of 5.9% is below the CH Media industry of 6.6%, indicating Tamedia’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Tamedia’s debt level, has declined over the past 3 years from 10.9% to 9.7%.
What does this mean?
Though Tamedia’s past data is helpful, it is only one aspect of my investment thesis. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. There could be factors that are influencing the entire industry thus the high industry growth rate over the same time period. You should continue to research Tamedia to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TAMN’s future growth? Take a look at our free research report of analyst consensus for TAMN’s outlook.
Financial Health: Are TAMN’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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
