In December 2017, Energiedienst Holding AG (SWX:EDHN) announced its most recent earnings update, which indicated that the business experienced a small tailwind, leading to a single-digit earnings growth of 0.95%. Today I want to provide a brief commentary on how market analysts predict Energiedienst Holding’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for Energiedienst Holding
Market analysts’ consensus outlook for next year seems positive, with earnings rising by a robust 24.06%. This growth seems to continue into the following year with rates reaching double digit 37.19% compared to today’s earnings, and finally hitting €44.30M by 2021.
While it’s helpful to be aware of the rate of growth each year relative to today’s figure, it may be more beneficial analyzing the rate at which the earnings are rising or falling on average every year. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Energiedienst Holding’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put 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 10.28%. This means, we can presume Energiedienst Holding will grow its earnings by 10.28% every year for the next couple of years.
Next Steps:
For Energiedienst Holding, I’ve put together three relevant factors 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 EDHN 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 EDHN 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 EDHN? 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.