Since 7C Solarparken AG (FRA:HRPK) released its earnings in December 2018, analysts seem cautiously bearish, as a 2.0% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 2.5%. With trailing-twelve-month net income at current levels of €5.9m, we should see this rise to €6.0m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
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What can we expect from 7C Solarparken in the longer term?
Over the next three years, it seems the consensus view of the 3 analysts covering HRPK is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for HRPK, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 20% based on the most recent earnings level of €5.9m to the final forecast of €11m by 2022. EPS reaches €0.18 in the final year of forecast compared to the current €0.12 EPS today. With a current profit margin of 15%, this movement will result in a margin of 19% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For 7C Solarparken, there are three important 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 7C Solarparken 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 7C Solarparken is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of 7C Solarparken? 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.