Today I will take a look at Public Joint-Stock Company TNS energo Rostov-on-Don’s (MISX:RTSB) most recent earnings update (30 September 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the electric utilities industry performed. As an investor, I find it beneficial to assess RTSB’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. Check out our latest analysis for TNS energo Rostov-on-Don
Did RTSB perform worse than its track record and industry?
I look at data from the most recent 12 months, 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 examine different stocks on a more comparable basis, using new information. For TNS energo Rostov-on-Don, its most recent trailing-twelve-month earnings is RUРУБ91.13M, which, against the prior year’s figure, has plunged by a substantial -49.47%. Since these figures are fairly short-term thinking, I’ve calculated an annualized five-year value for TNS energo Rostov-on-Don’s net income, which stands at RUРУБ186.46M This doesn’t seem to paint a better picture, since earnings seem to have steadily been declining over the longer term.What could be happening here? Well, let’s look at what’s going on with margins and if the entire industry is experiencing the hit as well. Revenue growth over the last few years, has been positive, yet earnings growth has been deteriorating. This means TNS energo Rostov-on-Don has been ramping up expenses, which is harming margins and earnings, and is not a sustainable practice. Scanning growth from a sector-level, the RU electric utilities industry has been enduring some headwinds over the past year, leading to an average earnings drop of -7.84%. This is a significant change, given that the industry has been delivering a positive rate of 2.92%, on average, over the last five years. This suggests that any recent headwind the industry is experiencing, it’s hitting TNS energo Rostov-on-Don harder than its peers.
What does this mean?
Though TNS energo Rostov-on-Don’s past data is helpful, it is only one aspect of my investment thesis. Typically companies that experience an extended period of diminishing earnings are undergoing some sort of reinvestment phase Though if the entire industry is struggling to grow over time, it may be a indicator of a structural change, which makes TNS energo Rostov-on-Don and its peers a riskier investment. I suggest you continue to research TNS energo Rostov-on-Don to get a more holistic view of the stock by looking at:
- 1. Financial Health: Is RTSB’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.
- 2. Valuation: What is RTSB worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether RTSB is currently mispriced by the market.
- 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.