Does CSG Systems International, Inc.'s (NASDAQ:CSGS) Past Performance Indicate A Stronger Future?
After looking at CSG Systems International, Inc.'s (NasdaqGS:CSGS) latest earnings announcement (31 December 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether CSG Systems International's performance has been impacted by industry movements. In this article I briefly touch on my key findings.
Check out our latest analysis for CSG Systems International
How Did CSGS's Recent Performance Stack Up Against Its Past?
CSGS's trailing twelve-month earnings (from 31 December 2019) of US$83m has jumped 25% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 9.7%, indicating the rate at which CSGS is growing has accelerated. What's enabled this growth? Let's take a look at if it is solely because of industry tailwinds, or if CSG Systems International has experienced some company-specific growth.
In terms of returns from investment, CSG Systems International has invested its equity funds well leading to a 21% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 7.9% exceeds the US IT industry of 6.7%, indicating CSG Systems International has used its assets more efficiently. However, its return on capital (ROC), which also accounts for CSG Systems International’s debt level, has declined over the past 3 years from 22% to 15%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 72% to 90% over the past 5 years.
What does this mean?
CSG Systems International's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While CSG Systems International has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research CSG Systems International to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for CSGS’s future growth? Take a look at our free research report of analyst consensus for CSGS’s outlook.
Financial Health: Are CSGS’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 31 December 2019. This may not be consistent with full year annual report figures.
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