Understanding Meliá Hotels International SA.’s (BME:MEL) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Meliá Hotels International is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. Check out our latest analysis for Meliá Hotels International
Did MEL’s recent earnings growth beat the long-term trend and the industry?
I like to use 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 technique allows me to assess different stocks on a more comparable basis, using the most relevant data points. For Meliá Hotels International, its latest trailing-twelve-month earnings is €132.23M, which, in comparison to last year’s level, has risen by 36.32%. Since these values are fairly short-term, I’ve determined an annualized five-year value for Meliá Hotels International’s net income, which stands at €45.03M This means on average, Meliá Hotels International has been able to gradually improve its earnings over the past few years as well.How has it been able to do this? Let’s take a look at if it is solely a result of an industry uplift, or if Meliá Hotels International has seen some company-specific growth. In the last couple of years, Meliá Hotels International expanded its bottom line faster than revenue by efficiently controlling its costs. This has caused a margin expansion and profitability over time. Scanning growth from a sector-level, the ES hospitality industry has been growing its average earnings by double-digit 18.87% over the past year, and 12.39% over the past five. This means that any tailwind the industry is enjoying, Meliá Hotels International is capable of leveraging this to its advantage.
What does this mean?
Meliá Hotels International’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Meliá Hotels International has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Meliá Hotels International to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MEL’s future growth? Take a look at our free research report of analyst consensus for MEL’s outlook.
- Financial Health: Is MEL’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.