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The most recent earnings update Comer Industries S.p.A.'s (BIT:COM) released in April 2019 confirmed that the business benefited from a strong tailwind, leading to a double-digit earnings growth of 37%. Below is a brief commentary on my key takeaways on how market analysts view Comer Industries's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for Comer Industries
Analysts' expectations for this coming year seems positive, with earnings expanding by a robust 13%. This growth seems to continue into the following year with rates arriving at double digit 40% compared to today’s earnings, and finally hitting €25m by 2022.
Although it is useful to understand the growth rate year by year relative to today’s value, it may be more insightful to estimate the rate at which the business is growing on average every year. The benefit of this approach is that we can get a better picture of the direction of Comer Industries's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 16%. This means, we can expect Comer Industries will grow its earnings by 16% every year for the next couple of years.
Next Steps:
For Comer Industries, there are three important aspects you should further examine:
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Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
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Valuation: What is COM worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether COM is currently mispriced by the market.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of COM? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.