Assessing Peab AB (publ)’s (OM:PEAB B) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess PEAB B’s recent performance announced on 30 September 2019 and evaluate these figures to its long-term trend and industry movements.
Commentary On PEAB B’s Past Performance
PEAB B’s trailing twelve-month earnings (from 30 September 2019) of kr2.2b has increased by 6.4% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 19%, indicating the rate at which PEAB B is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s occurring with margins and whether the entire industry is feeling the heat.
In terms of returns from investment, Peab has fallen short of achieving a 20% return on equity (ROE), recording 19% instead. Furthermore, its return on assets (ROA) of 5.7% is below the SE Construction industry of 6.9%, indicating Peab’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Peab’s debt level, has increased over the past 3 years from 9.6% to 13%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 96% to 74% over the past 5 years.
What does this mean?
Though Peab’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Peab to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PEAB B’s future growth? Take a look at our free research report of analyst consensus for PEAB B’s outlook.
- Financial Health: Are PEAB B’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 30 September 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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