TKH Group N.V. (AMS:TWEKA): Is It A Smart Long Term Opportunity?

Simply Wall St

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In December 2018, TKH Group N.V. (AMS:TWEKA) announced its earnings update. Overall, analysts seem cautiously optimistic, with profits predicted to increase by 14% next year against the past 5-year average growth rate of 12%. With trailing-twelve-month net income at current levels of €109m, we should see this rise to €124m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for TKH Group

Can we expect TKH Group to keep growing?

The longer term view from the 5 analysts covering TWEKA is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of TWEKA's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

ENXTAM:TWEKA Past and Future Earnings, July 12th 2019

This results in an annual growth rate of 12% based on the most recent earnings level of €109m to the final forecast of €161m by 2022. This leads to an EPS of €3.82 in the final year of projections relative to the current EPS of €2.58. In 2022, TWEKA's profit margin will have expanded from 6.7% to 8.0%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For TKH Group, I've compiled three fundamental factors you should look at:

  1. 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.
  2. Valuation: What is TKH Group 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 TKH Group is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of TKH Group? 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.