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Based on Atos SE’s (EPA:ATO) earnings update in December 2018, analyst forecasts seem bearish, as a 0.2% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 21%. With trailing-twelve-month net income at current levels of €630m, the consensus growth rate suggests that earnings will decline to €628m by 2020. Below is a brief commentary around Atos’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.
How is Atos going to perform in the near future?
The longer term view from the 11 analysts covering ATO is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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.
This results in an annual growth rate of 7.8% based on the most recent earnings level of €630m to the final forecast of €795m by 2022. EPS reaches €6.86 in the final year of forecast compared to the current €5.94 EPS today. With a current profit margin of 5.1%, this movement will result in a margin of 6.5% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Atos, there are three key factors you should further examine:
- 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 Atos 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 Atos is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Atos? 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.