Yahoo Finance How Does NIC Inc.’s (NASDAQ:EGOV) Earnings Growth Stack Up Against Industry Performance?
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When NIC Inc. (NASDAQ:EGOV) announced its most recent earnings (31 December 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well NIC has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see EGOV has performed.
View our latest analysis for NIC
How Well Did EGOV Perform?
EGOV’s trailing twelve-month earnings (from 31 December 2018) of US$58m has jumped 14% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 13%, indicating the rate at which EGOV is growing has accelerated. What’s the driver of this growth? Let’s see whether it is merely owing to industry tailwinds, or if NIC has experienced some company-specific growth.
In terms of returns from investment, NIC has invested its equity funds well leading to a 28% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 19% exceeds the US IT industry of 6.6%, indicating NIC has used its assets more efficiently. However, its return on capital (ROC), which also accounts for NIC’s debt level, has declined over the past 3 years from 56% to 34%.
What does this mean?
Though NIC’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as NIC gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research NIC to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for EGOV’s future growth? Take a look at our free research report of analyst consensus for EGOV’s outlook.
Financial Health: Are EGOV’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 31 December 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 editorial-team@simplywallst.com.
