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Helvetia Holding AG's (VTX:HELN) most recent earnings update in March 2019 showed that the company gained from a slight tailwind, eventuating to a single-digit earnings growth of 7.0%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Helvetia Holding's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Helvetia Holding
Market analysts' prospects for the upcoming year seems positive, with earnings rising by a robust 20%. This growth seems to continue into the following year with rates arriving at double digit 25% compared to today’s earnings, and finally hitting CHF549m by 2022.
Although it’s helpful to understand the growth rate year by year relative to today’s level, it may be more beneficial estimating the rate at which the earnings are growing every year, on average. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of Helvetia Holding's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've inserted 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 9.1%. This means, we can anticipate Helvetia Holding will grow its earnings by 9.1% every year for the next couple of years.
Next Steps:
For Helvetia Holding, I've compiled three essential 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 HELN 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 HELN 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 HELN? 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.