Harvia Oyj (HEL:HARVIA): Will The Growth Last?

Harvia Oyj’s (HEL:HARVIA) most recent earnings update in December 2018 confirmed that the business experienced a substantial tailwind, more than doubling its earnings from the prior year. Below, I’ve laid out key numbers on how market analysts view Harvia Oyj’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for Harvia Oyj

Analysts’ outlook for the coming year seems optimistic, with earnings climbing by a robust 28%. This growth seems to continue into the following year with rates arriving at double digit 45% compared to today’s earnings, and finally hitting €11m by 2022.

HLSE:HARVIA Past and Future Earnings, March 12th 2019
HLSE:HARVIA Past and Future Earnings, March 12th 2019

Even though it is informative knowing the growth year by year relative to today’s level, it may be more insightful to analyze the rate at which the company is moving every year, on average. The benefit of this method is that we can get a better picture of the direction of Harvia Oyj’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve inserted 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 11%. This means, we can assume Harvia Oyj will grow its earnings by 11% every year for the next few years.

Next Steps:

For Harvia Oyj, there are three important aspects 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 HARVIA 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 HARVIA is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of HARVIA? 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.