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Examining Cairo Communication S.p.A.’s (BIT:CAI) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess CAI’s latest performance announced on 31 March 2019 and weigh these figures against its longer term trend and industry movements.
How Well Did CAI Perform?
CAI’s trailing twelve-month earnings (from 31 March 2019) of €60m has increased by 3.8% 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 21%, indicating the rate at which CAI is growing has slowed down. Why could this be happening? Well, let’s examine what’s going on with margins and if the whole industry is experiencing the hit as well.
In terms of returns from investment, Cairo Communication has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 4.3% exceeds the IT Media industry of 3.4%, indicating Cairo Communication has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Cairo Communication’s debt level, has increased over the past 3 years from 5.5% to 9.4%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 36% to 30% over the past 5 years.
What does this mean?
Cairo Communication’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Cairo Communication has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Cairo Communication to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CAI’s future growth? Take a look at our free research report of analyst consensus for CAI’s outlook.
- Financial Health: Are CAI’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 March 2019. 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 email@example.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.