Does Logintrade S.A.’s (WSE:LGT) 24% Earnings Growth Make It An Outperformer?

Understanding Logintrade S.A.’s (WSE:LGT) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Logintrade is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period.

View our latest analysis for Logintrade

Commentary On LGT’s Past Performance

LGT’s trailing twelve-month earnings (from 31 December 2019) of zł352k has jumped 24% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 18%, indicating the rate at which LGT is growing has accelerated. What’s enabled this growth? Well, let’s take a look at whether it is solely because of industry tailwinds, or if Logintrade has experienced some company-specific growth.

WSE:LGT Income Statement, March 3rd 2020
WSE:LGT Income Statement, March 3rd 2020

In terms of returns from investment, Logintrade has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 6.7% exceeds the PL Online Retail industry of 5.6%, indicating Logintrade has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Logintrade’s debt level, has increased over the past 3 years from 7.1% to 8.2%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. While Logintrade has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Logintrade to get a more holistic view of the stock by looking at:

  1. Financial Health: Are LGT’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.
  2. Valuation: What is LGT 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 LGT is currently mispriced by the market.
  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 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.

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. Thank you for reading.