Yahoo Finance Interested In Veris Limited (ASX:VRS)? Here’s How It Performed Recently
Assessing Veris Limited’s (ASX:VRS) 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 VRS’s latest performance announced on 31 December 2017 and evaluate these figures to its historical trend and industry movements. Check out our latest analysis for Veris
Was VRS weak performance lately part of a long-term decline?
I like to use 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 technique allows me to analyze different stocks on a similar basis, using the most relevant data points. For Veris, its latest trailing-twelve-month earnings is AU$1.06M, which, in comparison to last year’s figure, has taken a dive by a significant -61.40%. Since these values are somewhat nearsighted, I’ve determined an annualized five-year value for VRS’s net income, which stands at AU$3.76M This doesn’t seem to paint a better picture, since earnings seem to have consistently been diminishing over time.
Why is this? Well, let’s take a look at what’s going on with margins and if the rest of the industry is experiencing the hit as well. In the last few years, revenue growth has fallen behind earnings, which suggests that Veris’s bottom line has been propelled by unmaintainable cost-cutting. Scanning growth from a sector-level, the Australian professional services industry has been enduring some headwinds in the previous twelve months, leading to an average earnings drop of -2.34%. This is a significant change, given that the industry has been delivering a positive rate of 3.29%, on average, over the past five years. This means whatever recent headwind the industry is facing, it’s hitting Veris harder than its peers.
What does this mean?
Though Veris’s past data is helpful, it is only one aspect of my investment thesis. Typically companies that endure a drawn out period of diminishing earnings are going through some sort of reinvestment phase Though if the entire industry is struggling to grow over time, it may be a sign of a structural change, which makes Veris and its peers a higher risk investment. You should continue to research Veris to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for VRS’s future growth? Take a look at our free research report of analyst consensus for VRS’s outlook.
Financial Health: Is VRS’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 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.
