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Assessing Regional Express Holdings Limited's (ASX:REX) 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 REX's latest performance announced on 30 June 2019 and evaluate these figures to its historical trend and industry movements.
See our latest analysis for Regional Express Holdings
How REX fared against its long-term earnings performance and its industry
REX's trailing twelve-month earnings (from 30 June 2019) of AU$18m has increased by 3.6% 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 33%, indicating the rate at which REX is growing has slowed down. To understand what's happening, 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, Regional Express Holdings has fallen short of achieving a 20% return on equity (ROE), recording 8.5% instead. However, its return on assets (ROA) of 6.8% exceeds the AU Airlines industry of 5.3%, indicating Regional Express Holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Regional Express Holdings’s debt level, has increased over the past 3 years from 2.7% to 12%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 23% to 1.5% over the past 5 years.
What does this mean?
Though Regional Express Holdings's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Regional Express Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Regional Express Holdings to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for REX’s future growth? Take a look at our free research report of analyst consensus for REX’s outlook.
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Financial Health: Are REX’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 30 June 2019. 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.