When Hansen Technologies Ltd’s (ASX:HSN) announced its latest earnings (30 June 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Hansen Technologies’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not HSN actually performed well. Below is a quick commentary on how I see HSN has performed. See our latest analysis for Hansen Technologies
How Well Did HSN Perform?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend enables me to examine various companies in a uniform manner using new information. “For Hansen Technologies, its “, most recent earnings is A$23.9M, which compared to the prior year’s level, has plunged by -8.42%. Since these values may be somewhat myopic, I have created an annualized five-year figure for HSN’s net income, which stands at A$16.4M. This means that although earnings declined from last year, over the past couple of years, Hansen Technologies’s profits have been growing on average.
How has it been able to do this? Let’s see if it is only because of an industry uplift, or if Hansen Technologies has seen some company-specific growth. The ascend in earnings seems to be driven by a solid top-line increase outpacing its growth rate of costs. Though this brought about a margin contraction, it has made Hansen Technologies more profitable. Looking at growth from a sector-level, the Australian software industry has been growing its average earnings by double-digit 15.42% over the past twelve months, and 12.47% over the past five. This means whatever uplift the industry is profiting from, Hansen Technologies has not been able to gain as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies are profitable, but have volatile earnings, can have many factors impacting its business. I suggest you continue to research Hansen Technologies to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for HSN’s future growth? Take a look at our free research report of analyst consensus for HSN’s outlook.
2. Financial Health: Is HSN’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.