Impressive Earnings May Not Tell The Whole Story For Agility Global (ADX:AGILITY)

Despite posting some strong earnings, the market for Agility Global PLC's (ADX:AGILITY) stock hasn't moved much. Our analysis suggests that shareholders have noticed something concerning in the numbers.

We've discovered 3 warning signs about Agility Global. View them for free.

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Agility Global's profit received a boost of US$52m in unusual items, over the last year. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Agility Global's Profit Performance

Arguably, Agility Global's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Agility Global's true underlying earnings power is actually less than its statutory profit. The good news is that, its earnings per share increased by 80% in the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. To that end, you should learn about the 3 warning signs we've spotted with Agility Global (including 1 which shouldn't be ignored).

Today we've zoomed in on a single data point to better understand the nature of Agility Global's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.