Many readers may already know that PMB Technology Berhad’s (KLSE:PMBTECH) stock rose 5.5% over the past month. Considering the company’s extraordinary performance, we decided to take a closer look at the company’s financial performance because the long-term determines the market’s results. Quick update on PMB Technology Berhad’s ROE today.
ROE or return on equity is a useful tool to evaluate how a company can generate profit on the capital it received from its shareholders. In simple terms, it measures the profitability of a company based on its shareholders’ equity.
You can see the history of changes in the price of PMB Technology Berhad
How is ROE Calculated?
The The ROE formula and:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders’ Equity
Therefore, based on the above formula, the ROE of PMB Technology Berhad is:
25% = RM215m ÷ RM878m (Based on the next twelve months to September 2022).
‘Returns’ are people’s income after tax in the last twelve months. This means that for every MYR1 of shareholder value, the company makes a profit of MYR0.25.
What Is the Relationship Between ROE and Economic Growth?
So far, we have learned that ROE is a measure of a company’s profitability. Based on the amount of profit that the company chooses to reinvest or “keep”, we can assess the company’s future profitability. In general, other things being equal, companies that achieve high financial returns and retain profits, have higher risk than companies that do not share these values.
PMB Technology Berhad stock price history
For starters, PMB Technology Berhad has a very high ROE which is impressive. Second, compared to the average ROE reported by companies of 11% we also do not recognize it. As a result, PMB Technology Berhad is growing exceptionally by 71% in the last five years, it is not surprising.
We then compared PMB Technology Berhad’s earnings growth to the industry and we are happy to see that the company’s earnings growth rate is higher compared to other companies that are growing by 30% over the same period.
Earnings growth is an important aspect to consider when evaluating stocks. An investor should try to determine whether the expected growth or decline in profits, in any case, is worth it. This helps them to know whether the stock is positioned for a good or bad future. You can find out the PMB Technology Berhad stock price history on the chart if you want to go beyond the selected date.
When does PMB Technology Berhad publish earnings?
The lowest price of shares of PMB Technology Berhad at 6.8% per year and at different times. This suggests that management is reinvesting significant profits to grow the business as evidenced by the growth the company is seeing.
In addition, PMB Technology Berhad has paid dividends for at least ten years which means that the company is keen to share its profits with its shareholders.
Summary
Overall, we feel that the performance of PMB Technology Berhad has been very good. In particular, we like the fact that the company is recovering its high profits at a reasonable rate of return. This has resulted in the company seeing significant growth in its profits. Having said that, the company’s revenue growth is expected to decline, as expected in the latest estimates. To learn more about the company’s latest predictions, check out this company’s future outlook.
Have a comment on this story? Worried about content? Contact each other and us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is more general in nature. We provide reviews based on historical data and expert forecasts using unbiased methods and our articles are not intended to be financial advice. It does not make recommendations to buy or sell any stock, and does not take into account your goals, or financial situation. We want to bring you long-term analytics driven by meaningful data. Note that our analysis may not be influenced by recent company announcements or stock prices. Simply Wall St has no position in any of the listed stocks.
Join the Paid Survey Section
You will receive a US$30 Amazon Gift card for 1 hour of your time as you help us create great investment tools for investors like you. Log in here
