Shengfeng Development Limited's (NASDAQ:SFWL) Stock Has Seen Strong Momentum: Does That Call For Deeper Study Of Its Financial Prospects?

Simply Wall St.10-26

Most readers would already be aware that Shengfeng Development's (NASDAQ:SFWL) stock increased significantly by 13% over the past three months. As most would know, fundamentals are what usually ...

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As most would know, fundamentals are what usually ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/transportation/nasdaq-sfwl/shengfeng-development/news/shengfeng-development-limiteds-nasdaqsfwl-stock-has-seen-str\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Shengfeng Development Limited's (NASDAQ:SFWL) Stock Has Seen Strong Momentum: Does That Call For Deeper Study Of Its Financial Prospects?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nShengfeng Development Limited's (NASDAQ:SFWL) Stock Has Seen Strong Momentum: Does That Call For Deeper Study Of Its Financial Prospects?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-26 21:40 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/transportation/nasdaq-sfwl/shengfeng-development/news/shengfeng-development-limiteds-nasdaqsfwl-stock-has-seen-str><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Most readers would already be aware that Shengfeng Development's (NASDAQ:SFWL) stock increased significantly by 13% over the past three months.   As most would know, fundamentals are what usually ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/transportation/nasdaq-sfwl/shengfeng-development/news/shengfeng-development-limiteds-nasdaqsfwl-stock-has-seen-str\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU2210149790.SGD","symbol_name":"Natixis Thematics Subscription Economy R/A SGD-H","start_time":0,"source_url":"https://simplywall.st/stocks/us/transportation/nasdaq-sfwl/shengfeng-development/news/shengfeng-development-limiteds-nasdaqsfwl-stock-has-seen-str","article_id":"2478477976","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/3211000-choice1-main-header/1585186856220"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2478477976","pubTimestamp":1729950051,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"Most readers would already be aware that Shengfeng Development's (NASDAQ:SFWL) stock increased significantly by 13...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","SQQQ":"纳指三倍做空ETF","IE00B64PRP62.GBP":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (GBP) ACC","QLD":"纳指两倍做多ETF","PSQ":"纳指反向ETF","IE00B3QW5Z07.USD":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (USD) ACC","IE00BGHQF748.EUR":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (EUR) ACC","BK4588":"碎股","SFWL":"盛丰发展有限公司","BK4131":"航空货运与物流",".IXIC":"NASDAQ Composite","TQQQ":"纳指三倍做多ETF","NDAQ":"纳斯达克OMX交易所","BK4112":"金融交易所和数据","QID":"纳指两倍做空ETF","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","BK4585":"ETF&股票定投概念"},"translate_title":"盛丰发展有限公司（纳斯达克：SFWL）的股票势头强劲：这是否是深入研究其财务前景的看涨期权？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SFWL":1,"NDAQ":1,".IXIC":1,"TQQQ":0.6,"SQQQ":0.6,"QLD":0.6,"QID":0.6,"PSQ":0.6,"NQmain":0.6,"MNQmain":0.6},"content_text":"Most readers would already be aware that Shengfeng Development's (NASDAQ:SFWL) stock increased significantly by 13% over the past three months.   As most would know, fundamentals are what usually guide market price movements over the long-term, so we decided to look at the company's key financial indicators today to determine if they have any role to play in the recent price movement.      In this article, we decided to focus on Shengfeng Development's  ROE.    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.  Simply put, it is used to assess the profitability of a company in relation to its equity capital.  Check out our latest analysis for Shengfeng Development  How To 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 Shengfeng Development is:7.5% = US$8.9m ÷ US$118m (Based on the trailing twelve months to June 2024). The 'return' is the yearly profit.  That means that for every $1 worth of shareholders' equity, the company generated $0.08 in profit.   What Is The Relationship Between ROE And Earnings Growth?  Thus far, we have learned that ROE measures how efficiently a company is generating its profits.  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.  Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes.  Shengfeng Development's Earnings Growth And 7.5% ROE   At first glance, Shengfeng Development's ROE doesn't look very promising.   A quick further study shows that the company's ROE doesn't compare favorably to the industry average of 12% either.   In spite of this, Shengfeng Development was able to grow its net income considerably, at a rate of 24% in the last 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.     Next, on comparing with the industry net income growth, we found that Shengfeng Development's growth is quite high when compared to the industry average growth of 11% in the same period, which is great to see.   NasdaqCM:SFWL Past Earnings Growth October 26th 2024 Earnings growth is an important metric to consider when valuing a stock.   It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline).   This then helps them determine if the stock is placed for a bright or bleak future.    If you're wondering about Shengfeng Development's's valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry.    Is Shengfeng Development Using Its Retained Earnings Effectively?    Shengfeng Development 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.     Summary    On the whole, we do feel that Shengfeng Development has some positive attributes.      With a high rate of reinvestment, albeit at a low ROE, the company has managed to see a considerable growth in its earnings.       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.    Our risks dashboard would have the 2 risks we have identified for Shengfeng Development.    New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave 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. 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