The latest earnings release Finlogic S.p.A.'s (BIT:FNL) announced in April 2019 signalled that the business experienced a robust tailwind, leading to a double-digit earnings growth of 20%. Investors may find it useful to understand how market analysts perceive Finlogic's earnings growth trajectory 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.
Market analysts' prospects for the coming year seems optimistic, with earnings growing by a robust 37%. This growth seems to continue into the following year with rates reaching double digit 78% compared to today’s earnings, and finally hitting €4.5m by 2022.
Even though it is helpful to be aware of the growth rate each year relative to today’s figure, it may be more beneficial to analyze the rate at which the business is growing every year, on average. The advantage of this method is that it ignores near term flucuations and accounts for the overarching direction of Finlogic's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've inserted 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 22%. This means that, we can anticipate Finlogic will grow its earnings by 22% every year for the next few years.
For Finlogic, I've put together three relevant factors 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 FNL 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 FNL is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of FNL? 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 firstname.lastname@example.org. 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.