How Has Atlanta Poland SA's (WSE:ATP) Earnings Fared Against The Long Term Trend

Today I will examine Atlanta Poland SA's (WSE:ATP) latest earnings update (31 March 2018) and compare these figures against its performance over the past couple of years, in addition to how the rest of ATP's industry performed. As a long-term investor, I find it useful to analyze the company's trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for Atlanta Poland

Did ATP beat its long-term earnings growth trend and its industry?

ATP's trailing twelve-month earnings (from 31 March 2018) of zł621.00k has jumped 22.97% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -15.85%, indicating the rate at which ATP is growing has accelerated. How has it been able to do this? Let's see if it is solely due to industry tailwinds, or if Atlanta Poland has experienced some company-specific growth.

Over the past few years, Atlanta Poland top-line expansion has overtaken earnings and the growth rate of expenses. Though this resulted in a margin contraction, it has cushioned Atlanta Poland's earnings contraction. Eyeballing growth from a sector-level, the PL consumer retailing industry has been growing its average earnings by double-digit 22.97% over the prior twelve months, . This is a change from a volatile drop of -3.55% in the past few years. This growth is a median of profitable companies of 4 Consumer Retailing companies in PL including Bio Planet, Emperia Holding and Dino Polska.

In terms of returns from investment, Atlanta Poland has not invested its equity funds well, leading to a 0.93% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 1.18% is below the PL Consumer Retailing industry of 3.25%, indicating Atlanta Poland's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Atlanta Poland’s debt level, has declined over the past 3 years from 8.76% to 0.65%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. There may be factors that are impacting the entire industry thus the high industry growth rate over the same period of time. I suggest you continue to research Atlanta Poland to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for ATP’s future growth? Take a look at our free research report of analyst consensus for ATP’s outlook.
2. Financial Health: Is ATP’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.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. 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.