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In December 2018, Stabilus S.A. (FRA:STM) released its earnings update. Generally, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by -7.0% in the upcoming year against the higher past 5-year average growth rate of 47%. By 2020, we can expect Stabilus’s bottom line to reach €98m, a jump from the current trailing-twelve-month of €105m. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
See our latest analysis for Stabilus
Exciting times ahead?
The view from 11 analysts over the next three years 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 STM, 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.
This results in an annual growth rate of 6.1% based on the most recent earnings level of €105m to the final forecast of €114m by 2022. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of €4.24 in the final year of forecast compared to the current €4.27 EPS today. However, the near term margins may change heading into 2022, from the current levels of 11% to 10%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Stabilus, 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 Stabilus 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 Stabilus 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 Stabilus? 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.