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Understanding Gibraltar Industries, Inc.’s (NASDAQ:ROCK) 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 Gibraltar Industries is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period.
How Well Did ROCK Perform?
ROCK’s trailing twelve-month earnings (from 31 December 2018) of US$64m has increased by 1.3% 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 53%, indicating the rate at which ROCK is growing has slowed down. Why could this be happening? Well, let’s look at what’s occurring with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, Gibraltar Industries has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 7.1% is below the US Building industry of 8.9%, indicating Gibraltar Industries’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Gibraltar Industries’s debt level, has increased over the past 3 years from 9.0% to 14%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 45% to 35% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Gibraltar Industries has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Gibraltar Industries to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for ROCK’s future growth? Take a look at our free research report of analyst consensus for ROCK’s outlook.
- Financial Health: Are ROCK’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.