Alliance Aviation Services Limited’s (ASX:AQZ) EPS Grew 29.9% In A Year. Was It Better Than Long-Term Trend?
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Alliance Aviation Services Limited (ASX:AQZ) useful as an attempt to give more color around how Alliance Aviation Services is currently performing. View our latest analysis for Alliance Aviation Services
Did AQZ’s recent EPS Growth beat the long-term trend and the industry?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to analyze different stocks on a more comparable basis, using the latest information. For Alliance Aviation Services, the most recent twelve-month earnings is A$19M, which, in comparison to the prior year’s level, has jumped up by 37.50%. Since these values are relatively short-term thinking, I have estimated an annualized five-year value for Alliance Aviation Services’s earnings, which stands at A$8M. This shows that, generally, Alliance Aviation Services has been able to consistently grow its profits over the past few years as well.
What’s enabled this growth? Well, let’s take a look at whether it is solely because of an industry uplift, or if Alliance Aviation Services has seen some company-specific growth. Over the last few years, Alliance Aviation Services top-line expansion has outpaced earnings and the growth rate of expenses. Though this has led to a margin contraction, it has lessened Alliance Aviation Services’s earnings contraction. Looking at growth from a sector-level, the Australian airlines industry has been enduring some headwinds over the last couple of years, leading to an average earnings drop of -6.92% in the most recent year. This shows that whatever recent headwind the industry is enduring, Alliance Aviation Services is less exposed compared to its peers.
What does this mean?
Alliance Aviation Services’s track record can be a valuable insight into its earnings performance, but it certainly 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 suggest you continue to research Alliance Aviation Services to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for AQZ’s future growth? Take a look at our free research report of analyst consensus for AQZ’s outlook.
2. Financial Health: Is AQZ’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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
