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Analyzing Poste Italiane SpA’s (BIT:PST) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess PST’s recent performance announced on 31 December 2017 and compare these figures to its long-term trend and industry movements. View our latest analysis for Poste Italiane

Did PST beat its long-term earnings growth trend and its industry?

I like to use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This allows me to examine many different companies on a similar basis, using the most relevant data points. For Poste Italiane, its latest trailing-twelve-month earnings is €689.00M, which, in comparison to the previous year’s figure, has moved up by 10.77%. Given that these values are fairly myopic, I’ve calculated an annualized five-year value for PST’s net income, which stands at €737.67M This means though earnings increased from last year’s level, over time, Poste Italiane’s earnings have been declining on average.

What could be happening here? Well, let’s take a look at what’s transpiring with margins and if the whole industry is experiencing the hit as well. Revenue growth over the last few years, has been positive, however earnings growth has been declining. This implies that Poste Italiane has been ramping up expenses, which is harming margins and earnings, and is not a sustainable practice. Looking at growth from a sector-level, the IT insurance industry has been relatively flat in terms of earnings growth over the last few years. This suggests that any near-term headwind the industry is experiencing, the impact on Poste Italiane has been softer relative to its peers.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Recent positive growth isn’t always indicative of a continued optimistic outlook.

I recommend you continue to research Poste Italiane to get a better picture of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for PST’s future growth? Take a look at our free research report of analyst consensus for PST’s outlook.

• 2. Financial Health: Is PST’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 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.