Understanding Firefly AB (publ)’s (STO:FIRE) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Firefly is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period.
How FIRE fared against its long-term earnings performance and its industry
FIRE’s trailing twelve-month earnings (from 31 December 2018) of kr15m has jumped 41% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 13%, indicating the rate at which FIRE is growing has accelerated. What’s the driver of this growth? Well, let’s take a look at if it is merely owing to an industry uplift, or if Firefly has experienced some company-specific growth.
In terms of returns from investment, Firefly has invested its equity funds well leading to a 31% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 12% exceeds the SE Electronic industry of 7.8%, indicating Firefly has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Firefly’s debt level, has declined over the past 3 years from 41% to 31%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Firefly gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Firefly to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for FIRE’s future growth? Take a look at our free research report of analyst consensus for FIRE’s outlook.
- Financial Health: Are FIRE’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 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. Thank you for reading.