Today I will take a look at Chuy’s Holdings Inc’s (NASDAQ:CHUY) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the hospitality industry performed. As an investor, I find it beneficial to assess CHUY’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. See our latest analysis for Chuy’s Holdings
How Well Did CHUY Perform?
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to assess different stocks in a uniform manner using new information. For Chuy’s Holdings, its latest trailing-twelve-month earnings is US$28.96M, which, relative to the previous year’s level, has risen by a significant 67.91%. Since these values may be fairly short-term, I’ve determined an annualized five-year value for Chuy’s Holdings’s net income, which stands at US$10.02M This shows that, on average, Chuy’s Holdings has been able to consistently grow its profits over the last couple of years as well.What’s enabled this growth? Let’s see if it is merely attributable to an industry uplift, or if Chuy’s Holdings has experienced some company-specific growth. Over the past couple of years, Chuy’s Holdings expanded its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Looking at growth from a sector-level, the US hospitality industry has been growing its average earnings by double-digit 14.51% in the previous twelve months, and 11.68% over the past five. This shows that whatever uplift the industry is deriving benefit from, Chuy’s Holdings is able to amplify this to its advantage.
What does this mean?
Though Chuy’s Holdings’s past data is helpful, it is only one aspect of my investment thesis. While Chuy’s Holdings has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Chuy’s Holdings to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for CHUY’s future growth? Take a look at our free research report of analyst consensus for CHUY’s outlook.
- 2. Financial Health: Is CHUY’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.