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Examining Aeffe S.p.A.'s (BIT:AEF) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess AEF's latest performance announced on 31 December 2018 and compare these figures to its longer term trend and industry movements.
View our latest analysis for Aeffe
Did AEF's recent earnings growth beat the long-term trend and the industry?
AEF's trailing twelve-month earnings (from 31 December 2018) of €17m has jumped 46% 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 57%, indicating the rate at which AEF is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s going on with margins and whether the rest of the industry is facing the same headwind.
In terms of returns from investment, Aeffe has fallen short of achieving a 20% return on equity (ROE), recording 8.7% instead. Furthermore, its return on assets (ROA) of 4.3% is below the IT Luxury industry of 9.9%, indicating Aeffe's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Aeffe’s debt level, has increased over the past 3 years from 3.7% to 13%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 69% to 32% over the past 5 years.
What does this mean?
Aeffe's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Aeffe has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Aeffe to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for AEF’s future growth? Take a look at our free research report of analyst consensus for AEF’s outlook.
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Financial Health: Are AEF’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.
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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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.