Yahoo Finance Black Knight, Inc.’s (NYSE:BKI) Earnings Dropped -7.6%, Did Its Industry Show Weakness Too?
Examining Black Knight, Inc.’s (NYSE:BKI) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess BKI’s latest performance announced on 31 December 2018 and weigh these figures against its longer term trend and industry movements.
See our latest analysis for Black Knight
Was BKI’s weak performance lately a part of a long-term decline?
BKI’s trailing twelve-month earnings (from 31 December 2018) of US$169m has declined by -7.6% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 73%, indicating the rate at which BKI is growing has slowed down. Why is this? Well, let’s take a look at what’s going on with margins and whether the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Black Knight has fallen short of achieving a 20% return on equity (ROE), recording 9.4% instead. However, its return on assets (ROA) of 6.0% exceeds the US IT industry of 6.0%, indicating Black Knight has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Black Knight’s debt level, has increased over the past 3 years from 5.8% to 8.0%.
What does this mean?
Though Black Knight’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I suggest you continue to research Black Knight to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for BKI’s future growth? Take a look at our free research report of analyst consensus for BKI’s outlook.
Financial Health: Are BKI’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 2018. This may not be consistent with full year annual report figures.
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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.
