Understanding Thule Group AB (publ)’s (OM:THULE) 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 Thule Group is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period.
How Well Did THULE Perform?
THULE’s trailing twelve-month earnings (from 31 December 2019) of kr883m has increased by 5.5% 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 17%, indicating the rate at which THULE is growing has slowed down. To understand what’s happening, let’s look at what’s occurring with margins and whether the rest of the industry is facing the same headwind.
In terms of returns from investment, Thule Group has invested its equity funds well leading to a 20% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 11% exceeds the SE Leisure industry of 8.2%, indicating Thule Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Thule Group’s debt level, has increased over the past 3 years from 14% to 17%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 89% to 51% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Thule Group has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Thule Group to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for THULE’s future growth? Take a look at our free research report of analyst consensus for THULE’s outlook.
- Financial Health: Are THULE’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 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 firstname.lastname@example.org. 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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