Examining Kid ASA’s (OB:KID) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess KID’s latest performance announced on 31 December 2017 and weight these figures against its longer term trend and industry movements. Check out our latest analysis for Kid

How KID fared against its long-term earnings performance and its industry

I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to assess different stocks on a similar basis, using the most relevant data points. For Kid, its most recent trailing-twelve-month earnings is ØRE141.33M, which compared to last year’s figure, has increased by a relatively soft 5.45%. Since these figures are somewhat short-term, I have computed an annualized five-year value for Kid’s earnings, which stands at ØRE104.30M This means on average, Kid has been able to consistently improve its profits over the last few years as well.

How has it been able to do this? Let’s see if it is only a result of industry tailwinds, or if Kid has seen some company-specific growth. Over the last couple of years, Kid expanded its bottom line faster than revenue by effectively controlling its costs. This has caused a margin expansion and profitability over time. Eyeballing growth from a sector-level, the NO specialty retail industry has been growing, albeit, at a muted single-digit rate of 7.57% in the past year, and 7.59% over the past five years. This shows that whatever tailwind the industry is enjoying, Kid has not been able to realize the gains unlike its average peer.

What does this mean?

Kid’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Kid has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Kid to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for KID’s future growth? Take a look at our free research report of analyst consensus for KID’s outlook.

2. Financial Health: Is KID’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 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.