Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess OSRAM Licht AG’s (XTRA:OSR) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View our latest analysis for OSRAM Licht
Was OSR’s recent earnings decline worse than the long-term trend and the industry?
I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method enables me to assess various companies on a more comparable basis, using new information. For OSRAM Licht, its latest trailing-twelve-month earnings is €248.00M, which, against the prior year’s figure, has plunged by -19.48%. Since these values are relatively short-term, I have estimated an annualized five-year figure for OSRAM Licht’s earnings, which stands at €184.51M This means that despite the fact that earnings growth was negative against the prior year, over a longer period of time, OSRAM Licht’s profits have been rising on average.How has it been able to do this? Well, let’s take a look at whether it is merely owing to industry tailwinds, or if OSRAM Licht has seen some company-specific growth. In the last couple of years, OSRAM Licht increased bottom-line, while its top-line declined, by efficiently managing its costs. This resulted in to a margin expansion and profitability over time. Looking at growth from a sector-level, the DE electrical industry has been growing its average earnings by double-digit 22.54% in the previous year, and 13.02% over the past five. This means any uplift the industry is benefiting from, OSRAM Licht has not been able to reap as much as its average peer.
What does this mean?
Though OSRAM Licht’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I suggest you continue to research OSRAM Licht to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for OSR’s future growth? Take a look at our free research report of analyst consensus for OSR’s outlook.
- 2. Financial Health: Is OSR’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.