BioDue S.p.A.’s (BIT:BIO2) most recent earnings announcement in April 2019 showed that the company experienced a slight headwind with earnings deteriorating from €4.1m to €4.0m, a change of -3.3%. Below, I’ve laid out key numbers on how market analysts view BioDue’s earnings growth outlook 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 upcoming year seems buoyant, with earnings expanding by a robust 15%. This growth seems to continue into the following year with rates reaching double digit 40% compared to today’s earnings, and finally hitting €6.7m by 2022.
While it’s helpful to be aware of the rate of growth each year relative to today’s level, it may be more valuable to analyze the rate at which the company is rising or falling on average every year. The benefit of this technique is that we can get a bigger picture of the direction of BioDue’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute 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 18%. This means that, we can assume BioDue will grow its earnings by 18% every year for the next couple of years.
For BioDue, there are 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 BIO2 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 BIO2 is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BIO2? 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 email@example.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.