How Does AS Company S.A.'s (ATH:ASCO) Earnings Growth Stack Up Against Industry Performance?

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Today I will take a look at AS Company S.A.'s (ATH:ASCO) most recent earnings update (31 December 2018) and compare these latest figures against its performance over the past few years, as well as how the rest of the leisure industry performed. As an investor, I find it beneficial to assess ASCO’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.

See our latest analysis for AS

How Did ASCO's Recent Performance Stack Up Against Its Past?

ASCO's trailing twelve-month earnings (from 31 December 2018) of €3.2m has increased by 7.2% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 26%, indicating the rate at which ASCO is growing has slowed down. To understand what's happening, let's examine what's going on with margins and if the rest of the industry is facing the same headwind.

In terms of returns from investment, AS has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 8.7% exceeds the GR Leisure industry of 7.3%, indicating AS has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for AS’s debt level, has increased over the past 3 years from 11% to 15%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 15% to 0.3% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research AS to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for ASCO’s future growth? Take a look at our free research report of analyst consensus for ASCO’s outlook.
2. Financial Health: Are ASCO’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.

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 editorial-team@simplywallst.com. 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.