Next Re SIIQ's (BIT:NR) Earnings May Just Be The Starting Point

When companies post strong earnings, the stock generally performs well, just like Next Re SIIQ S.p.A.'s (BIT:NR) stock has recently. Our analysis found some more factors that we think are good for shareholders.

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The Impact Of Unusual Items On Profit

To properly understand Next Re SIIQ's profit results, we need to consider the €11m expense attributed to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. Next Re SIIQ took a rather significant hit from unusual items in the year to December 2024. All else being equal, this would likely have the effect of making the statutory profit look worse than its underlying earnings power.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Next Re SIIQ .

Our Take On Next Re SIIQ's Profit Performance

As we mentioned previously, the Next Re SIIQ's profit was hampered by unusual items in the last year. Because of this, we think Next Re SIIQ's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! And it's also positive that the company showed enough improvement to book a profit this year, after losing money 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. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. In terms of investment risks, we've identified 3 warning signs with Next Re SIIQ , and understanding these bad boys should be part of your investment process.

This note has only looked at a single factor that sheds light on the nature of Next Re SIIQ's profit. But there are plenty of other ways to inform your opinion of a company. 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.