When Coherent, Inc.’s (NASDAQ:COHR) announced its latest earnings (29 September 2018), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Coherent’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not COHR actually performed well. Below is a quick commentary on how I see COHR has performed.
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Commentary On COHR’s Past Performance
COHR’s trailing twelve-month earnings (from 29 September 2018) of US$247m has jumped 19% 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 34%, indicating the rate at which COHR is growing has slowed down. What could be happening here? Well, let’s take a look at what’s transpiring with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, Coherent has fallen short of achieving a 20% return on equity (ROE), recording 19% instead. However, its return on assets (ROA) of 12% exceeds the US Electronic industry of 6.0%, indicating Coherent has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Coherent’s debt level, has increased over the past 3 years from 12% to 21%.
What does this mean?
Coherent’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Coherent to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for COHR’s future growth? Take a look at our free research report of analyst consensus for COHR’s outlook.
- Financial Health: Are COHR’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 29 September 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.