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 Cembre Sp.A.’s (BIT:CMB) 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 our latest analysis for Cembre
Did CMB’s recent earnings growth beat the long-term trend and the industry?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to assess many different companies on a similar basis, using new information. For Cembre, its most recent earnings (trailing twelve month) is €22.73M, which, in comparison to the previous year’s level, has moved up by 34.27%. Given that these values are fairly myopic, I have determined an annualized five-year figure for Cembre’s net income, which stands at €13.85M This shows that, on average, Cembre has been able to steadily raise its profits over the past couple of years as well.What’s enabled this growth? Let’s take a look at whether it is merely because of an industry uplift, or if Cembre has seen some company-specific growth. In the past few years, Cembre expanded its bottom line faster than revenue by successfully controlling its costs. This resulted in a margin expansion and profitability over time. Eyeballing growth from a sector-level, the IT electrical industry has been growing its average earnings by double-digit 10.55% over the prior year, and 10.05% over the past five years. This suggests that whatever uplift the industry is benefiting from, Cembre is capable of amplifying this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Cembre has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Cembre to get a better picture of the stock by looking at:
- Financial Health: Is CMB’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.
- Valuation: What is CMB worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CMB is currently mispriced by the market.
- 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.