In December 2018, Falck Renewables S.p.A. (BIT:FKR) announced its most recent earnings update, which suggested that the company benefited from a major tailwind, more than doubling its earnings from the prior year. Below, I’ve presented key growth figures on how market analysts perceive Falck Renewables’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.
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Analysts’ expectations for this coming year seems pessimistic, with earnings decreasing by a double-digit -12%. Beyond this, earnings will begin to improve, expanding year on year, and reaching €47m by 2022.
Even though it’s helpful to be aware of the rate of growth each year relative to today’s value, it may be more beneficial to evaluate the rate at which the business is moving on average every year. The pro of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Falck Renewables’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended 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 6.5%. This means, we can assume Falck Renewables will grow its earnings by 6.5% every year for the next few years.
For Falck Renewables, I’ve compiled three fundamental aspects you should further examine:
- 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 FKR 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 FKR is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of FKR? 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.