In December 2018, Schweiter Technologies AG (VTX:SWTQ) announced its earnings update. Overall, analysts seem fairly confident, with earnings expected to grow by 26% in the upcoming year against the past 5-year average growth rate of 16%. Presently, with latest-twelve-month earnings at CHF60m, we should see this growing to CHF76m by 2020. Below is a brief commentary on the longer term outlook the market has for Schweiter Technologies. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Can we expect Schweiter Technologies to keep growing?
Over the next three years, it seems the consensus view of the 5 analysts covering SWTQ is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of SWTQ's earnings growth over these next few years.
By 2022, SWTQ's earnings should reach CHF92m, from current levels of CHF60m, resulting in an annual growth rate of 14%. This leads to an EPS of CHF64.4 in the final year of projections relative to the current EPS of CHF42.1. With a current profit margin of 5.8%, this movement will result in a margin of 7.1% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Schweiter Technologies, I've compiled three essential aspects you should look at:
- 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.
- Valuation: What is Schweiter Technologies 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 Schweiter Technologies is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Schweiter Technologies? 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 email@example.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.