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.
大多数读者应该已经知道,Wabash National(纽约证券交易所代码:WNC)的股票在过去三个月里大幅上涨了14%。我们想知道,由于一家公司的长期基本面通常决定着市场结果,该公司的财务状况是否以及在价格变化中扮演了什么角色。在本文中,我们决定将重点放在Wabash National的ROE上。
净资产收益率,即股本回报率,是评估一家公司从股东那里获得投资回报的有效程度的有用工具。简而言之,它是用来评估一家公司相对于其权益资本的盈利能力。
查看我们对Wabash National的最新分析
如何计算股本回报率?
这个股本回报率公式是:
股本回报率=(持续经营的)净利润?股东权益
因此,根据上述公式,Wabash National的净资产收益率为:
28%=1.13亿美元×3.98亿美元(基于截至2022年12月的12个月的往绩)。
“回报”指的是一家公司过去一年的收益。这意味着,股东权益每增加1美元,公司就会产生0.28美元的利润。
为什么净资产收益率对收益增长很重要?
我们已经证实,净资产收益率是一家公司未来收益的有效盈利指标。我们现在需要评估公司将多少利润再投资或“保留”用于未来的增长,这就让我们对公司的增长潜力有了一个了解。假设其他条件不变,净资产收益率和利润保留率越高,与不一定具有这些特征的公司相比,公司的增长率就越高。
Wabash National的收益增长和28%的净资产收益率
首先,Wabash National拥有相当高的净资产收益率,这是很有趣的。此外,该公司的净资产收益率(ROE)高于13%的行业平均水平,这是相当了不起的。出于这个原因,Wabash National的五年净利润下降了28%,这让人不禁要问,为什么高净资产收益率并没有转化为收益增长。基于此,我们认为,可能还有本文迄今未讨论的其他原因,可能正在阻碍公司的增长。例如,可能是公司的派息率很高,或者企业的资本配置不当。
因此,下一步,我们将Wabash National的表现与行业进行了比较,令人失望的是,尽管该公司的收益一直在缩水,但同期该行业的收益一直以7.8%的速度增长。
赋予一家公司价值的基础在很大程度上与其盈利增长挂钩。投资者下一步需要确定的是,预期的收益增长是否已经计入了股价。通过这样做,他们将知道股票是将进入清澈的蓝色水域,还是等待沼泽水域。今天,WNC的价值是多少?我们免费研究报告中的内在价值信息图有助于直观地了解WNC目前是否被市场错误定价。
Wabash National是否正在有效地将其利润进行再投资?
尽管正常的三年中值派息率为34%(即留存率为66%),但Wabash National的收益缩水的事实相当令人费解。看起来可能还有其他一些原因来解释这方面的缺乏。例如,这项业务可能正在衰落。
此外,Wabash National已经支付股息六年了,这是一个相当长的时间,这表明管理层肯定已经意识到,尽管收益一直在缩水,但股东更喜欢一致的股息。
摘要
总体而言,我们确实觉得沃巴什国家银行有一些积极的属性。然而,低收益增长有点令人担忧,特别是考虑到该公司拥有高回报率,并将大部分利润进行再投资。从表面上看,可能还有其他一些因素正在阻碍增长,这些因素并不一定是控制企业的因素。话虽如此,我们研究了最新的分析师预测,发现尽管该公司过去的收益有所缩水,但分析师预计其未来的收益将会增长。要了解更多有关该公司未来收益增长预测的信息,请查看以下内容免费报告分析师对该公司的预测,以了解更多信息。
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。
译文内容由第三方软件翻译。
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