How Does Asseco Poland SA.'s (WSE:ACP) Earnings Growth Stack Up Against Industry Performance?

When Asseco Poland SA. (WSE:ACP) released its most recent earnings update (31 December 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Asseco Poland has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I've summarized the key takeaways on how I see ACP has performed. View our latest analysis for Asseco Poland

Could ACP beat the long-term trend and outperform its industry?

To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, 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 analyze different companies in a uniform manner using the most relevant data points. For Asseco Poland, its latest trailing-twelve-month earnings is ZŁ466.60M, which, against the previous year's level, has moved up by a non-trivial 54.86%. Since these figures may be relatively myopic, I’ve computed an annualized five-year figure for Asseco Poland's net income, which stands at ZŁ355.40M This means on average, Asseco Poland has been able to increasingly raise its profits over the last few years as well.

How has it been able to do this? Let's see if it is solely because of industry tailwinds, or if Asseco Poland has seen some company-specific growth. In the past few years, Asseco Poland top-line expansion has overtaken earnings and the growth rate of expenses. Though this brought about a margin contraction, it has cushioned Asseco Poland's earnings contraction. Scanning growth from a sector-level, the PL software industry has been relatively flat in terms of earnings growth over the prior year, evening out from a solid 21.00% over the last five years. This shows that whatever recent headwind the industry is facing, Asseco Poland is less exposed compared to its peers.

What does this mean?

While past data is useful, it doesn’t tell the whole story. While Asseco Poland 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 Poland to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for ACP’s future growth? Take a look at our free research report of analyst consensus for ACP’s outlook.
2. Financial Health: Is ACP’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 December 2017. 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.