Measuring LEONI AG’s (FRA:LEO) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess LEO’s recent performance announced on 30 September 2018 and weigh these figures against its long-term trend and industry movements.
View our latest analysis for LEONI
How Did LEO’s Recent Performance Stack Up Against Its Past?
LEO’s trailing twelve-month earnings (from 30 September 2018) of €130m has increased by 4.5% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 1.2%, indicating the rate at which LEO is growing has accelerated. How has it been able to do this? Let’s see if it is only due to an industry uplift, or if LEONI has seen some company-specific growth.
In terms of returns from investment, LEONI has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 4.3% is below the DE Auto Components industry of 4.9%, indicating LEONI’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for LEONI’s debt level, has declined over the past 3 years from 9.8% to 9.2%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 61% to 77% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While LEONI has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research LEONI to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for LEO’s future growth? Take a look at our free research report of analyst consensus for LEO’s outlook.
- Financial Health: Are LEO’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 September 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 editorial-team@simplywallst.com.