Where Public Joint-Stock Company Moscow Exchange MICEX-RTS's (MCX:MOEX) Earnings Growth Stands Against Its Industry

Understanding Public Joint-Stock Company Moscow Exchange MICEX-RTS's (MCX:MOEX) 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 Moscow Exchange MICEX-RTS is doing by evaluating its latest earnings with its longer term trend as well as its industry peers' performance over the same period.

Check out our latest analysis for Moscow Exchange MICEX-RTS

Was MOEX weak performance lately part of a long-term decline?

MOEX's trailing twelve-month earnings (from 31 March 2018) of RUруб19.55b has declined by -15.72% 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 18.56%, indicating the rate at which MOEX is growing has slowed down. Why is this? Well, let's look at what's transpiring with margins and if the rest of the industry is facing the same headwind.

Over the last few years, revenue growth has fallen behind which indicates that Moscow Exchange MICEX-RTS’s bottom line has been driven by unmaintainable cost-reductions. Inspecting growth from a sector-level, the RU capital markets industry has been growing its average earnings by double-digit 14.09% in the past year, and 12.61% over the past half a decade. Since the Capital Markets sector in RU is relatively small, I’ve included similar companies in the wider region in order to get a better idea of the growth, which is a median of profitable companies of companies such as Best Efforts Bank, and . This means that any tailwind the industry is benefiting from, Moscow Exchange MICEX-RTS has not been able to reap as much as its industry peers.

In terms of returns from investment, Moscow Exchange MICEX-RTS has not invested its equity funds well, leading to a 15.65% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 0.64% is below the RU Capital Markets industry of 2.41%, indicating Moscow Exchange MICEX-RTS's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Moscow Exchange MICEX-RTS’s debt level, has declined over the past 3 years from 23.85% to 18.54%.

What does this mean?

Moscow Exchange MICEX-RTS'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 capricious earnings, can have many factors affecting its business. I suggest you continue to research Moscow Exchange MICEX-RTS to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for MOEX’s future growth? Take a look at our free research report of analyst consensus for MOEX’s outlook.
2. Financial Health: Is MOEX’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 2018. This may not be consistent with full year annual report figures.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.