There May Be Underlying Issues With The Quality Of Astarta Holding's (WSE:AST) Earnings

Unsurprisingly, Astarta Holding PLC's (WSE:AST) stock price was strong on the back of its healthy earnings report. However, we think that shareholders may be missing some concerning details in the numbers.

View our latest analysis for Astarta Holding

How Do Unusual Items Influence Profit?

For anyone who wants to understand Astarta Holding's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from ₴824m worth of unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. Which is hardly surprising, given the name. If Astarta Holding doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current 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 Astarta Holding's Profit Performance

We'd posit that Astarta Holding's statutory earnings aren't a clean read on ongoing productivity, due to the large unusual item. Because of this, we think that it may be that Astarta Holding's statutory profits are better than its underlying earnings power. But at least holders can take some solace from the 49% EPS growth 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'd like to know more about Astarta Holding as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 1 warning sign for Astarta Holding you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Astarta Holding's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. 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.