Orbis S.A.’s (WSE:ORB) Earnings Grew 41%, Did It Beat Long-Term Trend?

Today I will examine Orbis S.A.’s (WSE:ORB) latest earnings update (30 September 2018) and compare these figures against its performance over the past couple of years, in addition to how the rest of ORB’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.

View our latest analysis for Orbis

Commentary On ORB’s Past Performance

ORB’s trailing twelve-month earnings (from 30 September 2018) of zł343m has jumped 41% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 32%, indicating the rate at which ORB is growing has accelerated. What’s the driver of this growth? Let’s take a look at if it is only owing to industry tailwinds, or if Orbis has seen some company-specific growth.

WSE:ORB Income Statement Export December 25th 18
WSE:ORB Income Statement Export December 25th 18

In terms of returns from investment, Orbis has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 11% exceeds the PL Hospitality industry of 7.7%, indicating Orbis has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Orbis’s debt level, has increased over the past 3 years from 8.1% to 10%.

What does this mean?

Orbis’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Orbis has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Orbis to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for ORB’s future growth? Take a look at our free research report of analyst consensus for ORB’s outlook.
  2. Financial Health: Are ORB’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 30 September 2018. This may not be consistent with full year annual report figures.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.