A.P.N. Promise S.A.’s (WSE:PRO) Earnings Grew 31%, Did It Beat Long-Term Trend?

Today I will take a look at A.P.N. Promise S.A.’s (WSE:PRO) most recent earnings update (31 March 2019) and compare these latest figures against its performance over the past few years, as well as how the rest of the it industry performed. As an investor, I find it beneficial to assess PRO’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.

View our latest analysis for A.P.N. Promise

Were PRO’s earnings stronger than its past performances and the industry?

PRO’s trailing twelve-month earnings (from 31 March 2019) of zł9.4m has jumped 31% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 13%, indicating the rate at which PRO is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is merely because of industry tailwinds, or if A.P.N. Promise has seen some company-specific growth.

WSE:PRO Income Statement, August 16th 2019
WSE:PRO Income Statement, August 16th 2019

In terms of returns from investment, A.P.N. Promise has invested its equity funds well leading to a 28% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 6.3% exceeds the PL IT industry of 6.0%, indicating A.P.N. Promise has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for A.P.N. Promise’s debt level, has increased over the past 3 years from 29% to 38%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 117% to 105% over the past 5 years.

What does this mean?

A.P.N. Promise’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 recommend you continue to research A.P.N. Promise to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for PRO’s future growth? Take a look at our free research report of analyst consensus for PRO’s outlook.
  2. Financial Health: Are PRO’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.
  3. 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 2019. 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.