Assessing SeSa S.p.A.'s (BIT:SES) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess SES's latest performance announced on 31 January 2020 and evaluate these figures to its historical trend and industry movements.
Commentary On SES's Past Performance
SES's trailing twelve-month earnings (from 31 January 2020) of €36m has jumped 24% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 8.7%, indicating the rate at which SES is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is merely because of an industry uplift, or if SeSa has seen some company-specific growth.
In terms of returns from investment, SeSa has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. Furthermore, its return on assets (ROA) of 3.5% is below the IT Electronic industry of 5.5%, indicating SeSa's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for SeSa’s debt level, has declined over the past 3 years from 15% to 15%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 39% to 83% over the past 5 years.
What does this mean?
SeSa's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While SeSa 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 SeSa to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SES’s future growth? Take a look at our free research report of analyst consensus for SES’s outlook.
- Financial Health: Are SES’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 January 2020. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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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