In This Article:
The most recent earnings release Elmos Semiconductor AG’s (XTRA:ELG) announced in December 2017 indicated that the company benefited from a large tailwind, leading to a high double-digit earnings growth of 57.11%. Today I want to provide a brief commentary on how market analysts view Elmos Semiconductor’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. Check out our latest analysis for Elmos Semiconductor
Market analysts’ consensus outlook for this coming year seems optimistic, with earnings expanding by a robust 18.92%. This growth seems to continue into the following year with rates arriving at double digit 32.16% compared to today’s earnings, and finally hitting €35.75M by 2021.
Even though it is useful to be aware of the growth rate each year relative to today’s level, it may be more insightful evaluating the rate at which the company is moving on average every year. The benefit of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Elmos Semiconductor’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 7.82%. This means, we can presume Elmos Semiconductor will grow its earnings by 7.82% every year for the next few years.
Next Steps:
For Elmos Semiconductor, I’ve put together three relevant aspects you should look at:
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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 ELG 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 ELG 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 ELG? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.