Advertisement
Canada markets open in 4 hours 24 minutes
  • S&P/TSX

    22,107.08
    +194.56 (+0.89%)
     
  • S&P 500

    5,248.49
    +44.91 (+0.86%)
     
  • DOW

    39,760.08
    +477.75 (+1.22%)
     
  • CAD/USD

    0.7349
    -0.0023 (-0.31%)
     
  • CRUDE OIL

    81.82
    +0.47 (+0.58%)
     
  • Bitcoin CAD

    96,130.07
    +1,488.71 (+1.57%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,216.30
    +3.60 (+0.16%)
     
  • RUSSELL 2000

    2,114.35
    +44.19 (+2.13%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • NASDAQ futures

    18,488.75
    -15.00 (-0.08%)
     
  • VOLATILITY

    12.95
    +0.17 (+1.33%)
     
  • FTSE

    7,957.36
    +25.38 (+0.32%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • CAD/EUR

    0.6812
    +0.0007 (+0.10%)
     

With A -4.95% Earnings Drop, Did Stalexport Autostrady SA (WSE:STX) Really Underperform?

Examining Stalexport Autostrady SA’s (WSE:STX) 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 STX’s latest performance announced on 31 March 2018 and compare these figures to its longer term trend and industry movements. View out our latest analysis for Stalexport Autostrady

How Well Did STX Perform?

STX’s trailing twelve-month earnings (from 31 March 2018) of zł149.39m has declined by -4.95% compared to the previous year. Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 36.86%, indicating the rate at which STX is growing has slowed down. Why could this be happening? Let’s examine what’s occurring with margins and if the entire industry is experiencing the hit as well.

ADVERTISEMENT

In the last couple of years, revenue growth has failed to keep up which suggests that Stalexport Autostrady’s bottom line has been driven by unsustainable cost-reductions. Viewing growth from a sector-level, the PL infrastructure industry has been growing, albeit, at a unexciting single-digit rate of 9.43% in the past twelve months, and 8.26% over the past five. This suggests that whatever uplift the industry is profiting from, Stalexport Autostrady has not been able to realize the gains unlike its industry peers.

WSE:STX Income Statement June 22nd 18
WSE:STX Income Statement June 22nd 18

In terms of returns from investment, Stalexport Autostrady has invested its equity funds well leading to a 21.22% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 10.90% exceeds the PL Infrastructure industry of 5.70%, indicating Stalexport Autostrady has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Stalexport Autostrady’s debt level, has increased over the past 3 years from 7.47% to 16.76%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 144.03% to 13.93% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors affecting its business. I suggest you continue to research Stalexport Autostrady to get a more holistic view of the stock by looking at:

  1. Financial Health: Is STX’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.

  2. Valuation: What is STX worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether STX is currently mispriced by the market.

  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 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass 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.