With 7.4% Earnings Growth, Did ePlus inc (NASDAQ:PLUS) Outperform The Industry?

Simply Wall St. - finance.yahoo.com Posted 5 years ago
image
View photos

Measuring ePlus inc’s (NASDAQ:PLUS) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess PLUS’s recent performance announced on 30 September 2018 and weigh these figures against its long-term trend and industry movements.

See our latest analysis for ePlus

Did PLUS’s recent earnings growth beat the long-term trend and the industry?

PLUS’s trailing twelve-month earnings (from 30 September 2018) of US$58m has increased by 7.4% 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 10%, indicating the rate at which PLUS is growing has slowed down. Why could this be happening? Well, let’s examine what’s transpiring with margins and if the entire industry is facing the same headwind.

NasdaqGS:PLUS Income Statement Export December 3rd 18
More

In terms of returns from investment, ePlus has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 7.4% exceeds the US Electronic industry of 6.0%, indicating ePlus has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for ePlus’s debt level, has declined over the past 3 years from 24% to 19%.

What does this mean?

ePlus’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as ePlus gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research ePlus to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for PLUS’s future growth? Take a look at our free research report of analyst consensus for PLUS’s outlook.
  2. Financial Health: Are PLUS’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.
  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 30 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 [email protected].