Understanding how Asseco Business Solutions S.A. (WSE:ABS) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Asseco Business Solutions is doing by comparing its latest earnings with its long-term trend as well as the performance of its software industry peers.
How Did ABS’s Recent Performance Stack Up Against Its Past?
ABS’s trailing twelve-month earnings (from 31 December 2018) of zł63m has jumped 25% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 18%, indicating the rate at which ABS is growing has accelerated. What’s enabled this growth? Well, let’s take a look at whether it is merely due to an industry uplift, or if Asseco Business Solutions has seen some company-specific growth.
In terms of returns from investment, Asseco Business Solutions has invested its equity funds well leading to a 21% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 17% exceeds the PL Software industry of 11%, indicating Asseco Business Solutions has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Asseco Business Solutions’s debt level, has increased over the past 3 years from 15% to 25%.
What does this mean?
Asseco Business Solutions’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Asseco Business Solutions has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Asseco Business Solutions to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for ABS’s future growth? Take a look at our free research report of analyst consensus for ABS’s outlook.
- Financial Health: Are ABS’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.
- 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 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.