Yahoo Finance Should Old Dominion Freight Line, Inc.'s (NASDAQ:ODFL) Recent Earnings Worry You?
Assessing Old Dominion Freight Line, Inc.'s (NasdaqGS:ODFL) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess ODFL's recent performance announced on 31 December 2019 and evaluate these figures to its long-term trend and industry movements.
View our latest analysis for Old Dominion Freight Line
Did ODFL's recent performance beat its trend and industry?
ODFL's trailing twelve-month earnings (from 31 December 2019) of US$616m has increased by 1.6% 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 21%, indicating the rate at which ODFL is growing has slowed down. What could be happening here? Well, let’s take a look at what’s occurring with margins and if the whole industry is experiencing the hit as well.
In terms of returns from investment, Old Dominion Freight Line has fallen short of achieving a 20% return on equity (ROE), recording 20% instead. However, its return on assets (ROA) of 15% exceeds the US Transportation industry of 7.2%, indicating Old Dominion Freight Line has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Old Dominion Freight Line’s debt level, has increased over the past 3 years from 20% to 23%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 10% to 1.5% over the past 5 years.
What does this mean?
Though Old Dominion Freight Line's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Old Dominion Freight Line gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Old Dominion Freight Line to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ODFL’s future growth? Take a look at our free research report of analyst consensus for ODFL’s outlook.
Financial Health: Are ODFL’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.
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.
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