With 6.9% Earnings Growth, Did Allied Motion Technologies Inc. (NASDAQ:AMOT) Outperform The Industry?

After reading Allied Motion Technologies Inc.'s (NasdaqGM:AMOT) latest earnings update (31 December 2019), I found it beneficial to look back at how the company has performed in the past and compare this against the most recent numbers. As a long-term investor I tend to pay attention to earnings trend, rather than a single number at one point in time. I also like to compare against an industry benchmark to understand whether AMOT has outperformed, or whether it is simply riding an industry wave. Below is a brief commentary on my key takeaways.

See our latest analysis for Allied Motion Technologies

How Well Did AMOT Perform?

AMOT's trailing twelve-month earnings (from 31 December 2019) of US$17m has increased by 6.9% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.5%, indicating the rate at which AMOT is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is only due to an industry uplift, or if Allied Motion Technologies has experienced some company-specific growth.

In terms of returns from investment, Allied Motion Technologies has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 7.2% exceeds the US Electrical industry of 6.6%, indicating Allied Motion Technologies has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Allied Motion Technologies’s debt level, has declined over the past 3 years from 12% to 11%.

What does this mean?

Allied Motion Technologies's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Allied Motion Technologies gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Allied Motion Technologies to get a better picture of the stock by looking at:

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