Was IAC/InterActiveCorp's (NASDAQ:IAC) Earnings Growth Better Than The Industry's?
Measuring IAC/InterActiveCorp's (NASDAQ:IAC) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess IAC's recent performance announced on 30 June 2019 and weigh these figures against its long-term trend and industry movements.
View our latest analysis for IAC/InterActiveCorp
Did IAC's recent earnings growth beat the long-term trend and the industry?
IAC's trailing twelve-month earnings (from 30 June 2019) of US$540m has increased by 7.5% 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 29%, indicating the rate at which IAC is growing has slowed down. To understand what's happening, let's examine what's transpiring with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, IAC/InterActiveCorp has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 7.5% exceeds the US Interactive Media and Services industry of 6.7%, indicating IAC/InterActiveCorp has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for IAC/InterActiveCorp’s debt level, has increased over the past 3 years from 6.8% to 8.7%.
What does this mean?
IAC/InterActiveCorp'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? You should continue to research IAC/InterActiveCorp to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for IAC’s future growth? Take a look at our free research report of analyst consensus for IAC’s outlook.
Financial Health: Are IAC’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 30 June 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 editorial-team@simplywallst.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.
