The Strong Earnings Posted By Construtora Tenda (BVMF:TEND3) Are A Good Indication Of The Strength Of The Business

Construtora Tenda S.A.'s (BVMF:TEND3) strong earnings report was rewarded with a positive stock price move. We did some digging and found some further encouraging factors that investors will like.

Our free stock report includes 2 warning signs investors should be aware of before investing in Construtora Tenda. Read for free now.

The Impact Of Unusual Items On Profit

To properly understand Construtora Tenda's profit results, we need to consider the R$56m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. If Construtora Tenda doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

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 Construtora Tenda's Profit Performance

Unusual items (expenses) detracted from Construtora Tenda's earnings over the last year, but we might see an improvement next year. Because of this, we think Construtora Tenda's earnings potential is at least as good as it seems, and maybe even better! And one can definitely find a positive in the fact that it made a profit this year, despite losing money last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you want to do dive deeper into Construtora Tenda, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Construtora Tenda you should know about.

This note has only looked at a single factor that sheds light on the nature of Construtora Tenda's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.