Latest news with #Vysarn
Yahoo
3 days ago
- Business
- Yahoo
Vysarn Limited (ASX:VYS) On An Uptrend: Could Fundamentals Be Driving The Stock?
Vysarn's (ASX:VYS) stock is up by 3.7% over the past month. Given that stock prices are usually aligned with a company's financial performance in the long-term, we decided to investigate if the company's decent financials had a hand to play in the recent price move. In this article, we decided to focus on Vysarn's ROE. Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. 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. ROE 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 Vysarn is: 8.1% = AU$7.4m ÷ AU$92m (Based on the trailing twelve months to December 2024). The 'return' is the amount earned after tax over the last twelve months. That means that for every A$1 worth of shareholders' equity, the company generated A$0.08 in profit. See our latest analysis for Vysarn So far, we've learned that ROE is a measure of a company's profitability. 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 everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. When you first look at it, Vysarn's ROE doesn't look that attractive. Next, when compared to the average industry ROE of 11%, the company's ROE leaves us feeling even less enthusiastic. Despite this, surprisingly, Vysarn saw an exceptional 28% net income growth over the past five years. Therefore, there could be other reasons behind this growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio. As a next step, we compared Vysarn's net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 20%. Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Vysarn is trading on a high P/E or a low P/E, relative to its industry. Vysarn doesn't pay any regular dividends to its shareholders, meaning that the company has been reinvesting all of its profits into the business. This is likely what's driving the high earnings growth number discussed above. Overall, we feel that Vysarn certainly does have some positive factors to consider. Even in spite of the low rate of return, the company has posted impressive earnings growth as a result of reinvesting heavily into its business. While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company. You can see the 1 risk we have identified for Vysarn by visiting our risks dashboard for free on our platform here. 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
17-03-2025
- Business
- Yahoo
Investing in Vysarn (ASX:VYS) five years ago would have delivered you a 958% gain
It might be of some concern to shareholders to see the Vysarn Limited (ASX:VYS) share price down 11% in the last month. But over five years returns have been remarkably great. Indeed, the share price is up a whopping 925% in that time. Arguably, the recent fall is to be expected after such a strong rise. Of course what matters most is whether the business can improve itself sustainably, thus justifying a higher price. It really delights us to see such great share price performance for investors. With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies. Check out our latest analysis for Vysarn To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. Vysarn's earnings per share are down 1.1% per year, despite strong share price performance over five years. So it's hard to argue that the earnings per share are the best metric to judge the company, as it may not be optimized for profits at this point. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics. On the other hand, Vysarn's revenue is growing nicely, at a compound rate of 36% over the last five years. In that case, the company may be sacrificing current earnings per share to drive growth. You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image). We know that Vysarn has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Vysarn's balance sheet strength is a great place to start, if you want to investigate the stock further. Investors should note that there's a difference between Vysarn's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Vysarn hasn't been paying dividends, but its TSR of 958% exceeds its share price return of 925%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders. It's nice to see that Vysarn shareholders have received a total shareholder return of 64% over the last year. That gain is better than the annual TSR over five years, which is 60%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Vysarn better, we need to consider many other factors. For example, we've discovered 1 warning sign for Vysarn that you should be aware of before investing here. If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Australian exchanges. 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
