Wabash National Corporation's (NYSE:WNC) Stock Is Going Strong: Have Financials A Role To Play?
Wabash National Corporation's (NYSE:WNC) Stock Is Going Strong: Have Financials A Role To Play?
Most readers would already be aware that Wabash National's (NYSE:WNC) stock increased significantly by 14% over the past three months. We wonder if and what role the company's financials play in that price change as a company's long-term fundamentals usually dictate market outcomes. In this article, we decided to focus on Wabash National's ROE.
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
See our latest analysis for Wabash National
How To Calculate Return On Equity?
The formula for return on equity is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Wabash National is:
28% = US$113m ÷ US$398m (Based on the trailing twelve months to December 2022).
The 'return' refers to a company's earnings over the last year. That means that for every $1 worth of shareholders' equity, the company generated $0.28 in profit.
Why Is ROE Important For Earnings Growth?
We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.
Wabash National's Earnings Growth And 28% ROE
To begin with, Wabash National has a pretty high ROE which is interesting. Additionally, the company's ROE is higher compared to the industry average of 13% which is quite remarkable. For this reason, Wabash National's five year net income decline of 28% raises the question as to why the high ROE didn't translate into earnings growth. Based on this, we feel that there might be other reasons which haven't been discussed so far in this article that could be hampering the company's growth. For example, it could be that the company has a high payout ratio or the business has allocated capital poorly, for instance.
So, as a next step, we compared Wabash National's performance against the industry and were disappointed to discover that while the company has been shrinking its earnings, the industry has been growing its earnings at a rate of 7.8% in the same period.
The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. What is WNC worth today? The intrinsic value infographic in our free research report helps visualize whether WNC is currently mispriced by the market.
Is Wabash National Efficiently Re-investing Its Profits?
In spite of a normal three-year median payout ratio of 34% (that is, a retention ratio of 66%), the fact that Wabash National's earnings have shrunk is quite puzzling. It looks like there might be some other reasons to explain the lack in that respect. For example, the business could be in decline.
Moreover, Wabash National has been paying dividends for six years, which is a considerable amount of time, suggesting that management must have perceived that the shareholders prefer consistent dividends even though earnings have been shrinking.
Summary
On the whole, we do feel that Wabash National has some positive attributes. Yet, the low earnings growth is a bit concerning, especially given that the company has a high rate of return and is reinvesting ma huge portion of its profits. By the looks of it, there could be some other factors, not necessarily in control of the business, that's preventing growth. With that said, we studied the latest analyst forecasts and found that while the company has shrunk its earnings in the past, analysts expect its earnings to grow in the future. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
大多數讀者應該已經知道,Wabash National(紐約證券交易所代碼:WNC)的股票在過去三個月裡大幅上漲了14%。我們想知道,由於一家公司的長期基本面通常決定著市場結果,該公司的財務狀況是否以及在價格變化中扮演了什麼角色。在本文中,我們決定將重點放在Wabash National的ROE上。
淨資產收益率,即股本回報率,是評估一家公司從股東那裡獲得投資回報的有效程度的有用工具。簡而言之,它是用來評估一家公司相對於其權益資本的盈利能力。
查看我們對Wabash National的最新分析
如何計算股本回報率?
這個股本回報率公式是:
股本回報率=(持續經營的)淨利潤?股東權益
因此,根據上述公式,Wabash National的淨資產收益率為:
28%=1.13億美元×3.98億美元(基於截至2022年12月的12個月的往績)。
“回報”指的是一家公司過去一年的收益。這意味著,股東權益每增加1美元,公司就會產生0.28美元的利潤。
為什麼淨資產收益率對收益增長很重要?
我們已經證實,淨資產收益率是一家公司未來收益的有效盈利指標。我們現在需要評估公司將多少利潤再投資或“保留”用於未來的增長,這就讓我們對公司的增長潛力有了一個瞭解。假設其他條件不變,淨資產收益率和利潤保留率越高,與不一定具有這些特徵的公司相比,公司的增長率就越高。
Wabash National的收益增長和28%的淨資產收益率
首先,Wabash National擁有相當高的淨資產收益率,這是很有趣的。此外,該公司的淨資產收益率(ROE)高於13%的行業平均水準,這是相當了不起的。出於這個原因,Wabash National的五年淨利潤下降了28%,這讓人不禁要問,為什麼高淨資產收益率並沒有轉化為收益增長。基於此,我們認為,可能還有本文迄今未討論的其他原因,可能正在阻礙公司的增長。例如,可能是公司的派息率很高,或者企業的資本配置不當。
因此,下一步,我們將Wabash National的表現與行業進行了比較,令人失望的是,儘管該公司的收益一直在縮水,但同期該行業的收益一直以7.8%的速度增長。
賦予一家公司價值的基礎在很大程度上與其盈利增長掛鉤。投資者下一步需要確定的是,預期的收益增長是否已經計入了股價。通過這樣做,他們將知道股票是將進入清澈的藍色水域,還是等待沼澤水域。今天,WNC的價值是多少?我們免費研究報告中的內在價值資訊圖有助於直觀地瞭解WNC目前是否被市場錯誤定價。
Wabash National是否正在有效地將其利潤進行再投資?
儘管正常的三年中值派息率為34%(即留存率為66%),但Wabash National的收益縮水的事實相當令人費解。看起來可能還有其他一些原因來解釋這方面的缺乏。例如,這項業務可能正在衰落。
此外,Wabash National已經支付股息六年了,這是一個相當長的時間,這表明管理層肯定已經意識到,儘管收益一直在縮水,但股東更喜歡一致的股息。
摘要
總體而言,我們確實覺得沃巴什國家銀行有一些積極的屬性。然而,低收益增長有點令人擔憂,特別是考慮到該公司擁有高回報率,並將大部分利潤進行再投資。從表面上看,可能還有其他一些因素正在阻礙增長,這些因素並不一定是控制企業的因素。話雖如此,我們研究了最新的分析師預測,發現儘管該公司過去的收益有所縮水,但分析師預計其未來的收益將會增長。要了解更多有關該公司未來收益增長預測的資訊,請查看以下內容免費報告分析師對該公司的預測,以瞭解更多資訊。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。
譯文內容由第三人軟體翻譯。
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