As AST Groupe (EPA:ASP) announced its earnings release on 31 December 2018, analysts seem cautiously bearish, with earnings expected to grow by 2.2% in the upcoming year compared with the higher past 5-year average growth rate of 57%. Presently, with latest-twelve-month earnings at €8.0m, we should see this growing to €8.2m by 2020. Below is a brief commentary around AST Groupe’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
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Can we expect AST Groupe to keep growing?
Over the next three years, it seems the consensus view of the 1 analysts covering ASP 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 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 €8.0m and the final forecast of €11m by 2022, the annual rate of growth for ASP’s earnings is 12%. EPS reaches €0.87 in the final year of forecast compared to the current €0.62 EPS today. Margins are currently sitting at 3.6%, which is expected to expand to 4.8% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For AST Groupe, there are three essential factors 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 AST Groupe 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 AST Groupe is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of AST Groupe? 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.