In This Article:
Damartex’s (EPA:ALDAR) most recent earnings announcement in June 2018 revealed that the business experienced a significant headwind with earnings declining by -36%. Below is my commentary, albeit very simple and high-level, on how market analysts predict Damartex’s earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
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Analysts’ outlook for this coming year seems positive, with earnings climbing by a significant 51%. This high growth in earnings is expected to continue, bringing the bottom line up to €20m by 2022.
Even though it is useful to understand the growth rate year by year relative to today’s figure, it may be more beneficial estimating the rate at which the earnings are growing every year, on average. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Damartex’s earnings trajectory over time, which may be more relevant for long term investors. To compute 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 20%. This means, we can expect Damartex will grow its earnings by 20% every year for the next couple of years.
Next Steps:
For Damartex, there are three relevant 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 ALDAR 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 ALDAR 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 ALDAR? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.