Assessing West Pharmaceutical Services Inc’s (NYSE:WST) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess WST’s recent performance announced on 30 September 2017 and evaluate these figures to its long-term trend and industry movements. Check out our latest analysis for West Pharmaceutical Services
Commentary On WST’s Past Performance
I look at data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to analyze different stocks on a more comparable basis, using the latest information. For West Pharmaceutical Services, its most recent trailing-twelve-month earnings is $189.8M, which compared to last year’s level, has jumped up by 37.64%. Since these figures may be relatively myopic, I have estimated an annualized five-year value for West Pharmaceutical Services’s earnings, which stands at $108.4M. This suggests that, on average, West Pharmaceutical Services has been able to steadily improve its bottom line over the past couple of years as well.What’s enabled this growth? Let’s see if it is only a result of industry tailwinds, or if West Pharmaceutical Services has seen some company-specific growth. In the last couple of years, West Pharmaceutical Services grew its bottom line faster than revenue by efficiently controlling its costs. This has caused a margin expansion and profitability over time. Scanning growth from a sector-level, the US medical equipment industry has been growing its average earnings by double-digit 18.95% in the prior year, and a less exciting 9.07% over the past couple of years. This means that whatever tailwind the industry is enjoying, West Pharmaceutical Services is capable of amplifying this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While West Pharmaceutical Services has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research West Pharmaceutical Services to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for WST’s future growth? Take a look at our free research report of analyst consensus for WST’s outlook.
2. Financial Health: Is WST’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.NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.