Has Porvair plc (LON:PRV) Improved Earnings Growth In Recent Times?
For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Porvair plc's (LSE:PRV) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.
View our latest analysis for Porvair
Could PRV beat the long-term trend and outperform its industry?
PRV's trailing twelve-month earnings (from 30 November 2019) of UK£11m has increased by 7.2% 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 12%, indicating the rate at which PRV is growing has slowed down. Why could this be happening? Well, let's examine what's transpiring with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Porvair has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 7.0% is below the GB Machinery industry of 8.0%, indicating Porvair's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Porvair’s debt level, has increased over the past 3 years from 11% to 12%.
What does this mean?
Porvair's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Porvair 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 Porvair to get a better picture of the stock by looking at:
Financial Health: Are PRV’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.
Valuation: What is PRV 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 PRV is currently mispriced by the market.
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 November 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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