Statutory Profit Doesn't Reflect How Good Sportradar Group's (NASDAQ:SRAD) Earnings Are

When companies post strong earnings, the stock generally performs well, just like Sportradar Group AG's (NASDAQ:SRAD) stock has recently. Our analysis found some more factors that we think are good for shareholders.

See our latest analysis for Sportradar Group

How Do Unusual Items Influence Profit?

For anyone who wants to understand Sportradar Group's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by €23m due to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. If Sportradar Group doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

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 Sportradar Group's Profit Performance

Unusual items (expenses) detracted from Sportradar Group's earnings over the last year, but we might see an improvement next year. Because of this, we think Sportradar Group's earnings potential is at least as good as it seems, and maybe even better! Furthermore, it has done a great job growing EPS over the 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. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. At Simply Wall St, we found 1 warning sign for Sportradar Group and we think they deserve your attention.

This note has only looked at a single factor that sheds light on the nature of Sportradar Group's 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. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.