Does Gr. Sarantis S.A.’s (ATH:SAR) 14% Earnings Growth Make It An Outperformer?

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Analyzing Gr. Sarantis S.A.’s (ATH:SAR) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess SAR’s recent performance announced on 31 December 2018 and compare these figures to its long-term trend and industry movements.

Check out our latest analysis for Gr. Sarantis

Did SAR’s recent earnings growth beat the long-term trend and the industry?

SAR’s trailing twelve-month earnings (from 31 December 2018) of €33m has jumped 14% 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 16%, indicating the rate at which SAR is growing has slowed down. What could be happening here? Well, let’s examine what’s occurring with margins and whether the rest of the industry is experiencing the hit as well.

ATSE:SAR Income Statement, July 8th 2019
ATSE:SAR Income Statement, July 8th 2019

In terms of returns from investment, Gr. Sarantis has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 9.5% exceeds the GR Personal Products industry of 7.8%, indicating Gr. Sarantis has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Gr. Sarantis’s debt level, has increased over the past 3 years from 13% to 15%.

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? You should continue to research Gr. Sarantis to get a more holistic view of the stock by looking at:

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