Stock Analysis

The Strong Earnings Posted By Lifetime Brands (NASDAQ:LCUT) Are A Good Indication Of The Strength Of The Business

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When companies post strong earnings, the stock generally performs well, just like Lifetime Brands, Inc.'s (NASDAQ:LCUT) stock has recently. We have done some analysis, and we found several positive factors beyond the profit numbers.

Check out our latest analysis for Lifetime Brands

NasdaqGS:LCUT Earnings and Revenue History March 16th 2022

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Lifetime Brands' profit was reduced by US$16m, due to unusual items, over the last year. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect Lifetime Brands to produce a higher profit next year, all else being equal.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Lifetime Brands' Profit Performance

Unusual items (expenses) detracted from Lifetime Brands' earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Lifetime Brands' statutory profit actually understates its earnings potential! And it's also positive that the company showed enough improvement to book a profit this year, after losing money last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. To that end, you should learn about the 3 warning signs we've spotted with Lifetime Brands (including 1 which is significant).

Today we've zoomed in on a single data point to better understand the nature of Lifetime Brands' profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

Valuation is complex, but we're helping make it simple.

Find out whether Lifetime Brands is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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