With A -9.1% Earnings Drop, Did Telestrada SA (WSE:TLS) Really Underperform?

Investors with a long-term horizong may find it valuable to assess Telestrada SA’s (WSE:TLS) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Telestrada is currently performing.

View our latest analysis for Telestrada

How Well Did TLS Perform?

TLS’s trailing twelve-month earnings (from 30 June 2018) of zł9m has declined by -9.1% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 34%, indicating the rate at which TLS is growing has slowed down. Why is this? Well, let’s look at what’s transpiring with margins and whether the rest of the industry is experiencing the hit as well.

WSE:TLS Income Statement Export November 8th 18
WSE:TLS Income Statement Export November 8th 18

In terms of returns from investment, Telestrada has invested its equity funds well leading to a 51% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 32% exceeds the PL Telecom industry of 4.6%, indicating Telestrada has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Telestrada’s debt level, has increased over the past 3 years from 18% to 54%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. You should continue to research Telestrada to get a better picture of the stock by looking at:

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