Carmat SA (EPA:ALCAR): Will The Growth Last?
The latest earnings announcement Carmat SA (EPA:ALCAR) released in March 2019 indicated that losses became smaller relative to the prior year's level as a result of recent tailwinds Below is a brief commentary on my key takeaways on how market analysts perceive Carmat's earnings growth outlook over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for Carmat
Analysts' outlook for next year seems relatively muted, with earnings continuing to flop around in the negative territory, reaching -€42.4m in 2020. This flat line trend continues into the following year before reducing to -€31.3m in 2022.
While it is informative knowing the growth each year relative to today’s value, it may be more valuable estimating the rate at which the earnings are moving on average every year. The advantage of this method is that we can get a bigger picture of the direction of Carmat's earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. 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 7.3%. This means, we can assume Carmat will grow its earnings by 7.3% every year for the next few years.
Next Steps:
For Carmat, I've put together three fundamental factors 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.
Future Earnings: How does ALCAR's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ALCAR? 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.
