For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Georgia Healthcare Group PLC’s (LON:GHG) 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 out our latest analysis for Georgia Healthcare Group
How Did GHG’s Recent Performance Stack Up Against Its Past?GHG’s trailing twelve-month earnings (from 31 March 2018) of UK£30.82m has declined by -37.25% 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 28.25%, indicating the rate at which GHG is growing has slowed down. What could be happening here? Well, let’s look at what’s transpiring with margins and if the whole industry is facing the same headwind.
Revenue growth in the past few years, has been positive, however, earnings growth has failed to keep up meaning Georgia Healthcare Group has been growing its expenses by a lot more. This harms margins and earnings, and is not a sustainable practice. Looking at growth from a sector-level, the UK healthcare industry has been enduring some headwinds over the previous twelve months, leading to an average earnings drop of -19.97%. This is a major change, given that the industry has constantly been delivering a a strong growth of 21.73% in the last five years. This shows that whatever recent headwind the industry is enduring, it’s hitting Georgia Healthcare Group harder than its peers.In terms of returns from investment, Georgia Healthcare Group has not invested its equity funds well, leading to a 8.85% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 4.89% exceeds the GB Healthcare industry of 4.70%, indicating Georgia Healthcare Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Georgia Healthcare Group’s debt level, has increased over the past 3 years from 5.66% to 5.73%.
What does this mean?
While past data is useful, it 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 Georgia Healthcare Group to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for GHG’s future growth? Take a look at our free research report of analyst consensus for GHG’s outlook.
- Financial Health: Is GHG’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.