Technical Publications Service S.p.A. (BIT:TPS): Will The Growth Last?

The latest earnings announcement Technical Publications Service S.p.A. (BIT:TPS) released in April 2019 revealed that the company benefited from a small tailwind, eventuating to a single-digit earnings growth of 1.3%. Below, I’ve presented key growth figures on how market analysts predict Technical Publications Service’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.

View our latest analysis for Technical Publications Service

Market analysts’ prospects for this coming year seems buoyant, with earnings growing by a robust 11%. This growth seems to continue into the following year with rates arriving at double digit 22% compared to today’s earnings, and finally hitting €3.0m by 2022.

BIT:TPS Past and Future Earnings, August 26th 2019
BIT:TPS Past and Future Earnings, August 26th 2019

While it is informative understanding the growth rate year by year relative to today’s figure, it may be more valuable to gauge the rate at which the business is rising or falling on average every year. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of Technical Publications Service’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 20%. This means that, we can expect Technical Publications Service will grow its earnings by 20% every year for the next couple of years.

Next Steps:

For Technical Publications Service, there are three key factors you should further research:

  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 TPS 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 TPS is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of TPS? 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.