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When ORBIS AG (ETR:OBS) released its most recent earnings update (31 December 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how ORBIS performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see OBS has performed.
Did OBS’s recent earnings growth beat the long-term trend and the industry?
OBS’s trailing twelve-month earnings (from 31 December 2018) of €2.2m has jumped 32% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 5.1%, indicating the rate at which OBS is growing has accelerated. What’s the driver of this growth? Let’s take a look at whether it is merely owing to industry tailwinds, or if ORBIS has seen some company-specific growth.
In terms of returns from investment, ORBIS has fallen short of achieving a 20% return on equity (ROE), recording 9.0% instead. Furthermore, its return on assets (ROA) of 4.5% is below the DE IT industry of 5.9%, indicating ORBIS’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for ORBIS’s debt level, has increased over the past 3 years from 6.9% to 10.0%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 2.1% to 0.3% over the past 5 years.
What does this mean?
ORBIS’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as ORBIS gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research ORBIS to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for OBS’s future growth? Take a look at our free research report of analyst consensus for OBS’s outlook.
- Financial Health: Are OBS’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 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.