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Understanding Roper Technologies, Inc.'s ( NYSE:ROP ) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Roper Technologies is doing by evaluating its latest earnings with its longer term trend as well as its industry peers' performance over the same period.
Commentary On ROP's Past Performance
ROP's trailing twelve-month earnings (from 31 March 2019) of US$1.1b has increased by 7.6% 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 13%, indicating the rate at which ROP is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and if the entire industry is facing the same headwind.
In terms of returns from investment, Roper Technologies has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. Furthermore, its return on assets (ROA) of 8.3% is below the US Industrials industry of 11%, indicating Roper Technologies's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Roper Technologies’s debt level, has declined over the past 3 years from 11% to 10%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 53% to 55% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Roper Technologies has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Roper Technologies to get a more holistic view of the stock by looking at:
- Future Outlook : What are well-informed industry analysts predicting for ROP’s future growth? Take a look at our free research report of analyst consensus for ROP’s outlook.
- Financial Health : Are ROP’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 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 email@example.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.