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Assessing Geke S.A.’s (ATH:PRESD) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Geke is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its hospitality industry peers.
How PRESD fared against its long-term earnings performance and its industry
PRESD’s trailing twelve-month earnings (from 31 December 2018) of €3.0m has jumped 21% 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 36%, indicating the rate at which PRESD is growing has slowed down. Why could this be happening? Well, let’s examine what’s going on with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, Geke has fallen short of achieving a 20% return on equity (ROE), recording 6.5% instead. Furthermore, its return on assets (ROA) of 4.7% is below the GR Hospitality industry of 6.1%, indicating Geke’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Geke’s debt level, has increased over the past 3 years from 5.5% to 7.2%.
What does this mean?
Though Geke’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Geke gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Geke to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PRESD’s future growth? Take a look at our free research report of analyst consensus for PRESD’s outlook.
- Financial Health: Are PRESD’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.