Stock Analysis

Does Greenyard NV's (EBR:GREEN) Past Performance Indicate A Weaker Future?

ENXTBR:GREEN
Source: Shutterstock

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

Advertisement

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.

ENXTBR:GREEN Income Statement May 1st 18
ENXTBR:GREEN Income Statement May 1st 18
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:

  1. 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.
  2. 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.
  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 30 September 2017. This may not be consistent with full year annual report figures.

New: Manage All Your Stock Portfolios in One Place

We've created the ultimate portfolio companion for stock investors, and it's free.

• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks

Try a Demo Portfolio for Free

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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.

About ENXTBR:GREEN

Greenyard

Supplies fresh, frozen, prepared fruits and vegetables, flowers, and plants in Germany, the Netherlands, Belgium, the United Kingdom, France, rest of Europe, and internationally.

Undervalued with excellent balance sheet.

Advertisement