Latest news with #MrPriceGroup
Yahoo
26-07-2025
- Business
- Yahoo
Mr Price Group Limited's (JSE:MRP) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?
Mr Price Group (JSE:MRP) has had a rough three months with its share price down 14%. However, the company's fundamentals look pretty decent, and long-term financials are usually aligned with future market price movements. Particularly, we will be paying attention to Mr Price Group's ROE today. 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. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. How Do You Calculate Return On Equity? Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Mr Price Group is: 26% = R3.8b ÷ R14b (Based on the trailing twelve months to March 2025). The 'return' is the profit over the last twelve months. That means that for every ZAR1 worth of shareholders' equity, the company generated ZAR0.26 in profit. See our latest analysis for Mr Price Group What Is The Relationship Between ROE And Earnings Growth? We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. Mr Price Group's Earnings Growth And 26% ROE At first glance, Mr Price Group seems to have a decent ROE. Further, the company's ROE compares quite favorably to the industry average of 15%. Probably as a result of this, Mr Price Group was able to see a decent growth of 6.1% over the last five years. We then compared Mr Price Group's net income growth with the industry and found that the company's growth figure is lower than the average industry growth rate of 11% in the same 5-year period, which is a bit concerning. Earnings growth is a huge factor in stock valuation. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. This then helps them determine if the stock is placed for a bright or bleak future. Is Mr Price Group fairly valued compared to other companies? These 3 valuation measures might help you decide. Is Mr Price Group Making Efficient Use Of Its Profits? Mr Price Group has a significant three-year median payout ratio of 63%, meaning that it is left with only 37% to reinvest into its business. This implies that the company has been able to achieve decent earnings growth despite returning most of its profits to shareholders. Besides, Mr Price Group has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Based on the latest analysts' estimates, we found that the company's future payout ratio over the next three years is expected to hold steady at 66%. Therefore, the company's future ROE is also not expected to change by much with analysts predicting an ROE of 29%. Conclusion In total, it does look like Mr Price Group has some positive aspects to its business. Its earnings have grown respectably as we saw earlier, which was likely due to the company reinvesting its earnings at a pretty high rate of return. However, given the high ROE, we do think that the company is reinvesting a small portion of its profits. This could likely be preventing the company from growing to its full extent. That being so, the latest analyst forecasts show that the company will continue to see an expansion in its earnings. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
Yahoo
05-07-2025
- Business
- Yahoo
Mr Price Group's (JSE:MRP) Strong Earnings Are Of Good Quality
Even though Mr Price Group Limited's (JSE:MRP) recent earnings release was robust, the market didn't seem to notice. We think that investors have missed some encouraging factors underlying the profit figures. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'. As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future". For the year to March 2025, Mr Price Group had an accrual ratio of -0.38. That implies it has very good cash conversion, and that its earnings in the last year actually significantly understate its free cash flow. To wit, it produced free cash flow of R7.6b during the period, dwarfing its reported profit of R3.65b. Mr Price Group shareholders are no doubt pleased that free cash flow improved over the last twelve months. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. As we discussed above, Mr Price Group's accrual ratio indicates strong conversion of profit to free cash flow, which is a positive for the company. Based on this observation, we consider it possible that Mr Price Group's statutory profit actually understates its earnings potential! And the EPS is up 9.3% annually, over the last three years. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example - Mr Price Group has 1 warning sign we think you should be aware of. Today we've zoomed in on a single data point to better understand the nature of Mr Price Group's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-06-2025
- Business
- Yahoo
Mr Price Group's (JSE:MRP) Strong Earnings Are Of Good Quality
The subdued stock price reaction suggests that Mr Price Group Limited's (JSE:MRP) strong earnings didn't offer any surprises. Investors are probably missing some underlying factors which are encouraging for the future of the company. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time. The ratio shows us how much a company's profit exceeds its FCF. That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. While having an accrual ratio above zero is of little concern, we do think it's worth noting when a company has a relatively high accrual ratio. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future". Mr Price Group has an accrual ratio of -0.35 for the year to March 2025. That indicates that its free cash flow quite significantly exceeded its statutory profit. To wit, it produced free cash flow of R7.6b during the period, dwarfing its reported profit of R3.65b. Mr Price Group shareholders are no doubt pleased that free cash flow improved over the last twelve months. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. As we discussed above, Mr Price Group's accrual ratio indicates strong conversion of profit to free cash flow, which is a positive for the company. Because of this, we think Mr Price Group's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! And the EPS is up 9.3% annually, over the last three years. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you want to do dive deeper into Mr Price Group, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Mr Price Group you should be aware of. This note has only looked at a single factor that sheds light on the nature of Mr Price Group's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Sign in to access your portfolio
Yahoo
10-06-2025
- Business
- Yahoo
Mr Price Group Full Year 2025 Earnings: EPS: R14.16 (vs R12.76 in FY 2024)
Revenue: R40.7b (up 8.3% from FY 2024). Net income: R3.65b (up 11% from FY 2024). Profit margin: 9.0% (up from 8.7% in FY 2024). The increase in margin was driven by higher revenue. EPS: R14.16 (up from R12.76 in FY 2024). We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. All figures shown in the chart above are for the trailing 12 month (TTM) period The primary driver behind last 12 months revenue was the Apparel segment contributing a total revenue of R31.5b (77% of total revenue). Notably, cost of sales worth R23.6b amounted to 58% of total revenue thereby underscoring the impact on earnings. The largest operating expense was Sales & Marketing costs, amounting to R8.46b (63% of total expenses). Explore how MRP's revenue and expenses shape its earnings. Looking ahead, revenue is forecast to grow 7.7% p.a. on average during the next 3 years, compared to a 7.9% growth forecast for the Specialty Retail industry in South Africa. Performance of the South African Specialty Retail industry. The company's shares are down 3.5% from a week ago. We don't want to rain on the parade too much, but we did also find 1 warning sign for Mr Price Group that you need to be mindful of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-06-2025
- Business
- Yahoo
Mr Price Group Full Year 2025 Earnings: EPS: R14.16 (vs R12.76 in FY 2024)
Revenue: R40.7b (up 8.3% from FY 2024). Net income: R3.65b (up 11% from FY 2024). Profit margin: 9.0% (up from 8.7% in FY 2024). The increase in margin was driven by higher revenue. EPS: R14.16 (up from R12.76 in FY 2024). We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. All figures shown in the chart above are for the trailing 12 month (TTM) period The primary driver behind last 12 months revenue was the Apparel segment contributing a total revenue of R31.5b (77% of total revenue). Notably, cost of sales worth R23.6b amounted to 58% of total revenue thereby underscoring the impact on earnings. The largest operating expense was Sales & Marketing costs, amounting to R8.46b (63% of total expenses). Explore how MRP's revenue and expenses shape its earnings. Looking ahead, revenue is forecast to grow 7.7% p.a. on average during the next 3 years, compared to a 7.9% growth forecast for the Specialty Retail industry in South Africa. Performance of the South African Specialty Retail industry. The company's shares are down 3.5% from a week ago. We don't want to rain on the parade too much, but we did also find 1 warning sign for Mr Price Group that you need to be mindful of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
