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Analyzing Callaway Golf Company's (NYSE:ELY) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess ELY's recent performance announced on 31 March 2019 and compare these figures to its long-term trend and industry movements.
See our latest analysis for Callaway Golf
Could ELY beat the long-term trend and outperform its industry?
ELY's trailing twelve-month earnings (from 31 March 2019) of US$91m has jumped 16% 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 45%, indicating the rate at which ELY is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and whether the entire industry is experiencing the hit as well.
In terms of returns from investment, Callaway Golf has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. Furthermore, its return on assets (ROA) of 5.4% is below the US Leisure industry of 9.0%, indicating Callaway Golf's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Callaway Golf’s debt level, has increased over the past 3 years from 7.2% to 8.9%.
What does this mean?
Callaway Golf's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Callaway Golf has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Callaway Golf to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for ELY’s future growth? Take a look at our free research report of analyst consensus for ELY’s outlook.
- Financial Health: Are ELY’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 March 2019. 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 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. Thank you for reading.