Yahoo Finance Does Criteo SA’s (NASDAQ:CRTO) Past Performance Indicate A Stronger Future?
Examining Criteo SA’s (NASDAQ:CRTO) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess CRTO’s latest performance announced on 31 March 2018 and weigh these figures against its longer term trend and industry movements. View out our latest analysis for Criteo
Were CRTO’s earnings stronger than its past performances and the industry?
CRTO’s trailing twelve-month earnings (from 31 March 2018) of US$98.58m has jumped 27.07% 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 41.62%, indicating the rate at which CRTO is growing has slowed down. To understand what’s happening, let’s take a look at what’s transpiring with margins and whether the rest of the industry is experiencing the hit as well.
In the past few years, revenue growth has not been able to catch up, which implies that Criteo’s bottom line has been driven by unmaintainable cost-cutting. Viewing growth from a sector-level, the US media industry has been growing its average earnings by double-digit 26.87% over the previous twelve months, and a less exciting 6.43% over the past half a decade. This shows that any uplift the industry is profiting from, Criteo is able to amplify this to its advantage.
In terms of returns from investment, Criteo has not invested its equity funds well, leading to a 10.71% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 6.68% is below the US Media industry of 6.68%, indicating Criteo’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Criteo’s debt level, has declined over the past 3 years from 19.46% to 15.36%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Criteo to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for CRTO’s future growth? Take a look at our free research report of analyst consensus for CRTO’s outlook.
Financial Health: Is CRTO’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.
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 March 2018. 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.
