Stock Analysis

DGB Group NV. (AMS:DGB): Has Recent Earnings Growth Beaten Long-Term Trend?

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When DGB Group NV. (ENXTAM:DGB) released its most recent earnings update (31 December 2016), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well DGB Group has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I've summarized the key takeaways on how I see DGB has performed. View our latest analysis for DGB Group

How Well Did DGB Perform?

To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This technique allows me to assess many different companies on a similar basis, using the latest information. For DGB Group, its most recent bottom-line (trailing twelve month) is -€233.00K, which compared to last year’s level, has become less negative. Given that these figures are relatively short-term, I’ve calculated an annualized five-year figure for DGB Group's earnings, which stands at -€12.95M. This shows that, although net income is negative, it has become less negative over the years.

ENXTAM:DGB Income Statement Mar 20th 18
ENXTAM:DGB Income Statement Mar 20th 18
We can further evaluate DGB Group's loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade DGB Group has seen an annual decline in revenue of -20.76%, on average. This adverse movement is a driver of the company's inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the NL commercial services industry has been growing, albeit, at a unexciting single-digit rate of 6.01% in the past year, and 9.29% over the previous five years. This shows that, although DGB Group is currently running a loss, it may have gained from industry tailwinds, moving earnings into a more favorable position.

What does this mean?

Though DGB Group's past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to envisage what will happen in the future and when. The most valuable step is to assess company-specific issues DGB Group may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research DGB Group to get a better picture of the stock by looking at:

  • 1. Financial Health: Is DGB’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.
  • 2. 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 December 2016. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.