In March 2018, Focus Home Interactive Société anonyme (EPA:ALFOC) released its earnings update. Generally, analyst consensus outlook appear vastly optimistic, with profits predicted to ramp up by an impressive 96% next year, relative to the past 5-year average growth rate of 19%. Currently with trailing-twelve-month earnings of €5m, we can expect this to reach €10m by 2019. Below is a brief commentary around Focus Home Interactive Société anonyme’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Can we expect Focus Home Interactive Société anonyme to keep growing?
The longer term view from the 4 analysts covering ALFOC is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for ALFOC, 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.
By 2021, ALFOC’s earnings should reach €11m, from current levels of €5m, resulting in an annual growth rate of 18%. This leads to an EPS of €2.15 in the final year of projections relative to the current EPS of €1.06. Growth in earnings appears to be a result of cost cutting activities, as revenues is expected to grow much slower than earnings. Margins is currently sitting at 7.2%, which is expected to expand to 9.2% by 2021.
Future outlook is only one aspect when you’re building an investment case for a stock. For Focus Home Interactive Société anonyme, I’ve put together three key aspects you should look at:
- 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 Focus Home Interactive Société anonyme 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 Focus Home Interactive Société anonyme is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Focus Home Interactive Société anonyme? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.