Assessing Iliad SA’s (EPA:ILD) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess ILD’s latest performance announced on 31 December 2018 and evaluate these figures to its historical trend and industry movements.
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Was ILD’s weak performance lately a part of a long-term decline?
ILD’s trailing twelve-month earnings (from 31 December 2018) of €323m has declined by -19% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 7.9%, indicating the rate at which ILD is growing has slowed down. Why could this be happening? Let’s examine what’s occurring with margins and whether the whole industry is experiencing the hit as well.
In terms of returns from investment, Iliad has fallen short of achieving a 20% return on equity (ROE), recording 9.2% instead. Furthermore, its return on assets (ROA) of 3.3% is below the FR Telecom industry of 7.8%, indicating Iliad’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Iliad’s debt level, has declined over the past 3 years from 14% to 7.8%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 66% to 115% over the past 5 years.
What does this mean?
Iliad’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I suggest you continue to research Iliad to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for ILD’s future growth? Take a look at our free research report of analyst consensus for ILD’s outlook.
- Financial Health: Are ILD’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.