After reading ENAV S.p.A.’s (BIT:ENAV) most recent earnings announcement (31 December 2019), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether ENAV’s performance has been impacted by industry movements. In this article I briefly touch on my key findings.
Did ENAV’s recent earnings growth beat the long-term trend and the industry?
ENAV’s trailing twelve-month earnings (from 31 December 2019) of €118m has increased by 3.5% 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 19%, indicating the rate at which ENAV is growing has slowed down. To understand what’s happening, let’s look at what’s transpiring with margins and if the rest of the industry is facing the same headwind.
In terms of returns from investment, ENAV has fallen short of achieving a 20% return on equity (ROE), recording 10% instead. However, its return on assets (ROA) of 6.2% exceeds the IT Infrastructure industry of 5.0%, indicating ENAV has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for ENAV’s debt level, has increased over the past 3 years from 6.7% to 10%.
What does this mean?
Though ENAV’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as ENAV gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research ENAV to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for ENAV’s future growth? Take a look at our free research report of analyst consensus for ENAV’s outlook.
- Financial Health: Are ENAV’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 email@example.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.
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