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As Progress Werk Oberkirch AG (FRA:PWO) announced its earnings release on 31 December 2018, analysts seem fairly confident, with profits predicted to increase by 38% next year compared with the past 5-year average growth rate of -2.3%. By 2020, we can expect Progress Werk Oberkirch’s bottom line to reach €9.2m, a jump from the current trailing-twelve-month of €6.7m. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Progress Werk Oberkirch in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
View our latest analysis for Progress Werk Oberkirch
Can we expect Progress Werk Oberkirch to keep growing?
The longer term view from the 2 analysts covering PWO is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for PWO, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of €6.7m and the final forecast of €13m by 2022, the annual rate of growth for PWO’s earnings is 22%. This leads to an EPS of €4.05 in the final year of projections relative to the current EPS of €2.13. With a current profit margin of 1.4%, this movement will result in a margin of 2.4% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Progress Werk Oberkirch, 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 Progress Werk Oberkirch 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 Progress Werk Oberkirch 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 Progress Werk Oberkirch? 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.