When Pareto Bank ASA (OB:PARB) announced its most recent earnings (31 December 2017), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Pareto Bank performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see PARB has performed. Check out our latest analysis for Pareto Bank
How Did PARB’s Recent Performance Stack Up Against Its Past?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method enables me to assess various companies on a similar basis, using the most relevant data points. For Pareto Bank, its most recent earnings (trailing twelve month) is ØRE312.59M, which, relative to the prior year’s level, has increased by 26.40%. Since these figures may be somewhat short-term, I have computed an annualized five-year figure for PARB’s earnings, which stands at ØRE148.15M This suggests that, generally, Pareto Bank has been able to increasingly grow its bottom line over the last couple of years as well.How has it been able to do this? Let’s see whether it is solely attributable to industry tailwinds, or if Pareto Bank has seen some company-specific growth. Over the last few years, Pareto Bank grew its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the NO banks industry has been growing, albeit, at a muted single-digit rate of 7.45% over the past twelve months, and 5.84% over the past five years. This suggests that any uplift the industry is deriving benefit from, Pareto Bank is capable of amplifying this to its advantage.
What does this mean?
Pareto Bank’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Pareto Bank 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 Pareto Bank to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for PARB’s future growth? Take a look at our free research report of analyst consensus for PARB’s outlook.
- 2. Financial Health: Is PARB’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.
- 3. 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.