Does Apex Biotechnology Corp.'s (TPE:1733) 20% Earnings Growth Make It An Outperformer?

Measuring Apex Biotechnology Corp.'s (TSEC:1733) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 1733's recent performance announced on 31 December 2019 and compare these figures to its historical trend and industry movements.

Check out our latest analysis for Apex Biotechnology

Did 1733 beat its long-term earnings growth trend and its industry?

1733's trailing twelve-month earnings (from 31 December 2019) of NT$114m has jumped 20% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -28%, indicating the rate at which 1733 is growing has accelerated. What's enabled this growth? Let's take a look at if it is merely due to industry tailwinds, or if Apex Biotechnology has experienced some company-specific growth.

In terms of returns from investment, Apex Biotechnology has fallen short of achieving a 20% return on equity (ROE), recording 6.7% instead. Furthermore, its return on assets (ROA) of 4.3% is below the TW Medical Equipment industry of 6.2%, indicating Apex Biotechnology's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Apex Biotechnology’s debt level, has declined over the past 3 years from 12% to 9.3%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 21% to 29% over the past 5 years.

What does this mean?

Apex Biotechnology's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. There may be factors that are impacting the industry as a whole, thus the high industry growth rate over the same time period. You should continue to research Apex Biotechnology to get a better picture of the stock by looking at:

1. Financial Health: Are 1733’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 1733 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 1733 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.

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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