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Since Kojamo Oyj (HEL:KOJAMO) released its earnings in March 2019, the consensus outlook from analysts appear fairly confident, with profits predicted to increase by 37% next year relative to the past 5-year average growth rate of 16%. Presently, with latest-twelve-month earnings at €222m, we should see this growing to €304m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect Kojamo Oyj to keep growing?
The longer term expectations from the 4 analysts of KOJAMO is tilted towards the negative sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of €222m and the final forecast of €269m by 2022, the annual rate of growth for KOJAMO’s earnings is -3.0%. However, if we exclude extraordinary items from earnings, we see that the profits is predicted to rise over time, resulting in an EPS of €1.06 in the final year of forecast compared to the current €0.93 EPS today. Earnings decline appears to be a result of cost outpacing top line growth of 4.8% over the next few years. But by the end of 2022, analysts are expecting slower cost growth, resulting in a margin expansion, from the recent 62% to 63%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Kojamo Oyj, I’ve put together three fundamental aspects you should further research:
- 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 Kojamo Oyj 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 Kojamo Oyj is currently mispriced by the market.
- 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 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.