Kojamo Oyj (HEL:KOJAMO): Immense Growth Potential?

Based on Kojamo Oyj’s (HEL:KOJAMO) earnings update on 31 December 2018, analyst forecasts appear to be in-line with its track record, as upcoming earnings growth is expected to be 18% next year, similar to the range of average earnings growth for the past five years of 19% per year. By 2020, we can expect Kojamo Oyj’s bottom line to reach €261m, a jump from the current trailing-twelve-month of €222m. Below is a brief commentary on the longer term outlook the market has for Kojamo Oyj. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

View our latest analysis for Kojamo Oyj

What can we expect from Kojamo Oyj in the longer term?

The longer term view from the 3 analysts covering KOJAMO is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of KOJAMO’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

HLSE:KOJAMO Past and Future Earnings, March 4th 2019
HLSE:KOJAMO Past and Future Earnings, March 4th 2019

From the current net income level of €222m and the final forecast of €236m by 2022, the annual rate of growth for KOJAMO’s earnings is 3.3%. This leads to an EPS of €0.95 in the final year of projections relative to the current EPS of €0.93. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 62% to 53% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Kojamo Oyj, I’ve compiled three relevant aspects you should further examine:

  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. Future Earnings: How does Kojamo Oyj’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Kojamo Oyj? 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.