Analyzing Greenyard NV’s (ENXTBR:GREEN) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess GREEN’s recent performance announced on 30 September 2017 and compare these figures to its long-term trend and industry movements. View our latest analysis for Greenyard
Was GREEN’s recent earnings decline worse than the long-term trend and the industry?
I look at data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This enables me to assess different companies on a similar basis, using new information. For Greenyard, its latest earnings (trailing twelve month) is €5.79M, which, relative to the previous year’s level, has fallen by a substantial -75.28%. Since these values are somewhat short-term, I have calculated an annualized five-year figure for Greenyard’s net income, which stands at €9.04M This doesn’t seem to paint a better picture, as earnings seem to have consistently been deteriorating over the longer term.Why is this? Well, let’s look at what’s transpiring with margins and whether the whole industry is experiencing the hit as well. Revenue growth over the past few years, has been positive, however, earnings growth has been lagging behind meaning Greenyard has been increasing its expenses by a lot more. This hurts margins and earnings, and is not a sustainable practice. Eyeballing growth from a sector-level, the BE food industry has been growing, albeit, at a subdued single-digit rate of 8.73% in the past year, and 7.52% over the last five years. This shows that whatever uplift the industry is deriving benefit from, Greenyard has not been able to leverage it as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Generally companies that endure an extended period of diminishing earnings are going through some sort of reinvestment phase in order to keep up with the recent industry expansion and disruption. I suggest you continue to research Greenyard to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for GREEN’s future growth? Take a look at our free research report of analyst consensus for GREEN’s outlook.
- Financial Health: Is GREEN’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.