WNS (Holdings)'s (NYSE:WNS) stock is up by a considerable 11% over the past three months. Given that the market rewards strong financials in the long-term, we wonder if that is the case in this instance. Particularly, we will be paying attention to WNS (Holdings)'s ROE today.
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders.
See our latest analysis for WNS (Holdings)
How Do You Calculate Return On Equity?
The formula for return on equity is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for WNS (Holdings) is:
20% = US$138m ÷ US$705m (Based on the trailing twelve months to June 2022).
The 'return' refers to a company's earnings over the last year. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.20 in profit.
Why Is ROE Important For Earnings Growth?
We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. 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.
WNS (Holdings)'s Earnings Growth And 20% ROE
At first glance, WNS (Holdings) seems to have a decent ROE. Further, the company's ROE is similar to the industry average of 18%. Consequently, this likely laid the ground for the decent growth of 13% seen over the past five years by WNS (Holdings).
As a next step, we compared WNS (Holdings)'s net income growth with the industry and found that the company has a similar growth figure when compared with the industry average growth rate of 14% in the same period.
NYSE:WNS Past Earnings Growth October 5th 2022
The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. Doing so will help them establish if the stock's future looks promising or ominous. Is WNS fairly valued? This infographic on the company's intrinsic value has everything you need to know.
Is WNS (Holdings) Making Efficient Use Of Its Profits?
WNS (Holdings) doesn't pay any dividend, meaning that all of its profits are being reinvested in the business, which explains the fair bit of earnings growth the company has seen.
Summary
On the whole, we feel that WNS (Holdings)'s performance has been quite good. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see substantial growth in its earnings. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This 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.
WNS(Holdings)(NYSE:WNS)的股票在過去三個月裏上漲了11%。考慮到市場長期回報強勁的財務業績,我們想知道在這種情況下是否如此。特別是,我們今天將關注WNS(Holdings)的ROE。
股本回報率(ROE)是對一家公司增值和管理投資者資金的效率的測試。換句話説,這是一個衡量公司股東提供的資本回報率的盈利比率。
查看我們對WNS(Holdings)的最新分析
你如何計算股本回報率?
這個股本回報率公式是:
股本回報率=(持續經營的)淨利潤?股東權益
因此,根據上述公式,WNS(Holdings)的淨資產收益率為:
20%=1.38億美元×7.05億美元(基於截至2022年6月的12個月)。
“回報”指的是一家公司過去一年的收益。一種將其概念化的方法是,公司每擁有1美元的股東資本,就能獲得0.20美元的利潤。
為什麼淨資產收益率對收益增長很重要?
我們已經證實,淨資產收益率是一家公司未來收益的有效盈利指標。我們現在需要評估公司將多少利潤再投資或“保留”用於未來的增長,這就讓我們對公司的增長潛力有了一個瞭解。假設其他條件不變,淨資產收益率和利潤保留率越高,與不一定具有這些特徵的公司相比,公司的增長率就越高。
WNS(Holdings)的盈利增長和20%的淨資產收益率
乍一看,WNS(控股)似乎擁有不錯的淨資產收益率。此外,該公司的淨資產收益率(ROE)接近行業平均水平18%。因此,這可能為WNS(Holdings)在過去五年中實現13%的體面增長奠定了基礎。
下一步,我們將WNS(Holdings)的淨收入增長與行業進行比較,發現該公司的增長數字與同期14%的行業平均增長率相似。
紐約證券交易所:WNS過去的收益增長2022年10月5日
賦予一家公司價值的基礎在很大程度上與其盈利增長掛鈎。投資者下一步需要確定的是,預期的收益增長是否已經計入了股價。這樣做將有助於他們確定該股的未來看起來是光明的還是不祥的。WNS的價值公平嗎?這張關於公司內在價值的信息圖包含了你需要知道的一切。
WNS(Holdings)是否有效地利用了其利潤?
WNS(Holdings)不支付任何股息,這意味着它的所有利潤都將再投資於業務,這就解釋了該公司的收益增長相當可觀。
摘要
總的來説,我們覺得WNS(Holdings)的業績相當不錯。具體來説,我們喜歡該公司將大量利潤以高回報率進行再投資。這當然導致了該公司的收益大幅增長。話雖如此,最新的行業分析師預測顯示,該公司的收益增長預計將放緩。要了解更多有關該公司未來收益增長預測的信息,請查看以下內容免費報告分析師對該公司的預測,以瞭解更多信息。
對這篇文章有什麼反饋嗎?擔心內容嗎? 保持聯繫直接與我們聯繫。或者,也可以給編輯組發電子郵件,地址是implywallst.com。
本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。