Examining Fourth Dimension Solutions Limited’s (NSEI:FOURTHDIM) 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 FOURTHDIM’s latest performance announced on 31 March 2017 and compare these figures to its longer term trend and industry movements. Check out our latest analysis for Fourth Dimension Solutions
How FOURTHDIM fared against its long-term earnings performance and its industry
I look at 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 allows me to analyze different stocks on a similar basis, using new information. Fourth Dimension Solutions’s latest earnings is ₹219.8M, which, against the prior year’s figure, has risen by a relatively muted 9.43%. Since these figures may be relatively nearsighted, I’ve computed an annualized five-year value for FOURTHDIM’s net income, which stands at ₹92.5M. This shows that, generally, Fourth Dimension Solutions has been able to consistently grow its net income over the last couple of years as well.
What’s enabled this growth? Let’s take a look at whether it is merely because of industry tailwinds, or if Fourth Dimension Solutions has experienced some company-specific growth. In the last few years, Fourth Dimension Solutions grew its bottom line faster than revenue by effectively controlling its costs. This has caused a margin expansion and profitability over time. Inspecting growth from a sector-level, the IN it services industry has been growing, albeit, at a unexciting single-digit rate of 8.18% in the prior twelve months, and a substantial 13.88% over the previous few years. This means whatever tailwind the industry is profiting from, Fourth Dimension Solutions is able to leverage this to its advantage.
What does this mean?
Though Fourth Dimension Solutions’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Fourth Dimension Solutions gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Fourth Dimension Solutions to get a better picture of the stock by looking at:
1. Financial Health: Is FOURTHDIM’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.