Prashkovsky Investments and Construction's (TLV:PRSK) Profits May Not Reveal Underlying Issues

The recent earnings posted by Prashkovsky Investments and Construction Ltd. (TLV:PRSK) were solid, but the stock didn't move as much as we expected. However the statutory profit number doesn't tell the whole story, and we have found some factors which might be of concern to shareholders.

See our latest analysis for Prashkovsky Investments and Construction

The Impact Of Unusual Items On Profit

For anyone who wants to understand Prashkovsky Investments and Construction's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from ₪166m worth of unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. Which is hardly surprising, given the name. We can see that Prashkovsky Investments and Construction's positive unusual items were quite significant relative to its profit in the year to December 2024. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Prashkovsky Investments and Construction.

Our Take On Prashkovsky Investments and Construction's Profit Performance

As we discussed above, we think the significant positive unusual item makes Prashkovsky Investments and Construction's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Prashkovsky Investments and Construction's underlying earnings power is lower than its statutory profit. The good news is that, its earnings per share increased by 36% in the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, Prashkovsky Investments and Construction has 3 warning signs (and 2 which don't sit too well with us) we think you should know about.

Today we've zoomed in on a single data point to better understand the nature of Prashkovsky Investments and Construction's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.