Measuring Kongsberg Gruppen ASA's (OB:KOG) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess KOG's recent performance announced on 31 December 2019 and weigh these figures against its long-term trend and industry movements.
Commentary On KOG's Past Performance
KOG's trailing twelve-month earnings (from 31 December 2019) of kr700m has declined by -0.1% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of -4.7%, indicating the rate at which KOG is growing has slowed down. What could be happening here? Well, let’s take a look at what’s transpiring with margins and whether the rest of the industry is facing the same headwind.
In terms of returns from investment, Kongsberg Gruppen has fallen short of achieving a 20% return on equity (ROE), recording 5.6% instead. Furthermore, its return on assets (ROA) of 2.2% is below the NO Aerospace & Defense industry of 5.0%, indicating Kongsberg Gruppen's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Kongsberg Gruppen’s debt level, has increased over the past 3 years from 3.9% to 5.7%.
What does this mean?
Though Kongsberg Gruppen's past data is helpful, it is only one aspect of my investment thesis. Generally companies that endure a drawn out period of reduction in earnings are going through some sort of reinvestment phase in order to keep up with the recent industry growth and disruption. I suggest you continue to research Kongsberg Gruppen to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for KOG’s future growth? Take a look at our free research report of analyst consensus for KOG’s outlook.
- Financial Health: Are KOG’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 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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