Ascom Holding AG’s (OTCPK:ACML.F) most recent earnings announcement in December 2018 suggested that the company experienced a significant headwind with earnings declining by -17%. Investors may find it useful to understand how market analysts perceive Ascom Holding’s earnings growth trajectory over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Market analysts’ prospects for the coming year seems optimistic, with earnings rising by a robust 17%. This growth seems to continue into the following year with rates arriving at double digit 46% compared to today’s earnings, and finally hitting CHF37m by 2022.
Although it’s helpful to understand the rate of growth year by year relative to today’s value, it may be more insightful to analyze the rate at which the business is moving on average every year. The advantage of this approach is that it ignores near term flucuations and accounts for the overarching direction of Ascom Holding’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve appended 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 18%. This means, we can expect Ascom Holding will grow its earnings by 18% every year for the next few years.
For Ascom Holding, I’ve put together three pertinent 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.
- Valuation: What is ACML.F 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 ACML.F is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ACML.F? 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.