Today I will examine Green Plains Partners LP’s (NASDAQ:GPP) latest earnings update (30 September 2017) and compare these figures against its performance over the past couple of years, in addition to how the rest of GPP’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. Check out our latest analysis for Green Plains Partners
How Did GPP’s Recent Performance Stack Up Against Its Past?
I prefer 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 technique enables me to assess many different companies on a more comparable basis, using the most relevant data points. For Green Plains Partners, its latest trailing-twelve-month earnings is $57.8M, which, relative to the prior year’s figure, has moved up by 12.34%. Given that these values may be relatively short-term thinking, I have created an annualized five-year value for GPP’s net income, which stands at $29.7M. This means generally, Green Plains Partners has been able to consistently grow its bottom line over the last couple of years as well.What’s enabled this growth? Let’s see if it is only owing to an industry uplift, or if Green Plains Partners has experienced some company-specific growth. Over the past couple of years, Green Plains Partners expanded its bottom line faster than revenue by effectively controlling its costs. This resulted in a margin expansion and profitability over time. Inspecting growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 18.47% in the prior twelve months, . This is a change from a volatile drop of -7.52% in the previous few years. This suggests that, in the recent industry expansion, Green Plains Partners has not been able to reap as much as its average peer.
What does this mean?
Though Green Plains Partners’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Green Plains Partners gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Green Plains Partners to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for GPP’s future growth? Take a look at our free research report of analyst consensus for GPP’s outlook.
- 2. Financial Health: Is GPP’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.