We Think TRE Holdings' (TSE:9247) Profit Is Only A Baseline For What They Can Achieve

Investors were underwhelmed by the solid earnings posted by TRE Holdings Corporation (TSE:9247) recently. Our analysis says that investors should be optimistic, as the strong profit is built on solid foundations.

See our latest analysis for TRE Holdings

The Impact Of Unusual Items On Profit

Importantly, our data indicates that TRE Holdings' profit was reduced by JP¥2.0b, due to unusual items, over the last year. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. If TRE Holdings doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On TRE Holdings' Profit Performance

Unusual items (expenses) detracted from TRE Holdings' earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that TRE Holdings' statutory profit actually understates its earnings potential! And on top of that, its earnings per share increased by 21% in the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you want to do dive deeper into TRE Holdings, you'd also look into what risks it is currently facing. For example, TRE Holdings has 2 warning signs (and 1 which is significant) we think you should know about.

This note has only looked at a single factor that sheds light on the nature of TRE Holdings' 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. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.

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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.