After looking at Evercore Inc’s (NYSE:EVR) latest earnings announcement (30 June 2018), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. 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 Evercore’s performance has been impacted by industry movements. In this article I briefly touch on my key findings.
Commentary On EVR’s Past Performance
EVR’s trailing twelve-month earnings (from 30 June 2018) of US$191m has increased by 7.8% 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 27%, indicating the rate at which EVR is growing has slowed down. To understand what’s happening, let’s take a look at what’s going on with margins and if the whole industry is feeling the heat.
In terms of returns from investment, Evercore has invested its equity funds well leading to a 29% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 12% exceeds the US Capital Markets industry of 3.3%, indicating Evercore has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Evercore’s debt level, has increased over the past 3 years from 17% to 36%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 36% to 23% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Evercore gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Evercore to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for EVR’s future growth? Take a look at our free research report of analyst consensus for EVR’s outlook.
- Financial Health: Are EVR’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 30 June 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 firstname.lastname@example.org.