Where Formosa Taffeta Co., Ltd. (TPE:1434) Stands In Terms Of Earnings Growth Against Its Industry

Examining Formosa Taffeta Co., Ltd.'s (TSEC:1434) 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 1434's latest performance announced on 31 December 2019 and compare these figures to its longer term trend and industry movements.

View our latest analysis for Formosa Taffeta

Were 1434's earnings stronger than its past performances and the industry?

1434's trailing twelve-month earnings (from 31 December 2019) of NT$4.0b has jumped 20% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 7.5%, indicating the rate at which 1434 is growing has accelerated. How has it been able to do this? Let's take a look at if it is merely due to an industry uplift, or if Formosa Taffeta has experienced some company-specific growth.

In terms of returns from investment, Formosa Taffeta has fallen short of achieving a 20% return on equity (ROE), recording 7.2% instead. Furthermore, its return on assets (ROA) of 2.5% is below the TW Luxury industry of 4.5%, indicating Formosa Taffeta's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Formosa Taffeta’s debt level, has declined over the past 3 years from 3.4% to 1.5%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. While Formosa Taffeta has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Formosa Taffeta to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for 1434’s future growth? Take a look at our free research report of analyst consensus for 1434’s outlook.
2. Financial Health: Are 1434’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 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 editorial-team@simplywallst.com. 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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