After reading Compagnie des Alpes SA’s (EPA:CDA) latest earnings update (31 March 2019), I found it beneficial to look back at how the company has performed in the past and compare this against the most recent numbers. As a long-term investor I tend to pay attention to earnings trend, rather than a single number at one point in time. I also like to compare against an industry benchmark to understand whether CDA has outperformed, or whether it is simply riding an industry wave. Below is a brief commentary on my key takeaways.
How Well Did CDA Perform?
CDA’s trailing twelve-month earnings (from 31 March 2019) of €51m has declined by -19% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 20%, indicating the rate at which CDA is growing has slowed down. Why is this? Well, let’s take a look at what’s occurring with margins and if the whole industry is experiencing the hit as well.
In terms of returns from investment, Compagnie des Alpes has fallen short of achieving a 20% return on equity (ROE), recording 6.0% instead. However, its return on assets (ROA) of 3.1% exceeds the FR Hospitality industry of 2.7%, indicating Compagnie des Alpes has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Compagnie des Alpes’s debt level, has increased over the past 3 years from 6.1% to 7.4%.
What does this mean?
Compagnie des Alpes’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. You should continue to research Compagnie des Alpes to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CDA’s future growth? Take a look at our free research report of analyst consensus for CDA’s outlook.
- Financial Health: Are CDA’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 March 2019. This may not be consistent with full year annual report figures.
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