What Are Analysts Saying About Axway Software SA’s (EPA:AXW) Growth?

The most recent earnings update Axway Software SA’s (EPA:AXW) released in December 2018 suggested that the business gained from a significant tailwind, more than doubling its earnings from the prior year. Today I want to provide a brief commentary on how market analysts view Axway Software’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for Axway Software

Market analysts’ consensus outlook for next year seems pessimistic, with earnings decreasing by a double-digit -18%. However, the next few years show a contrast, with earnings growth becoming positive in 2021, with the bottom line increasing to €15m in 2022.

ENXTPA:AXW Past and Future Earnings, March 6th 2019
ENXTPA:AXW Past and Future Earnings, March 6th 2019

Although it is useful to understand the growth year by year relative to today’s figure, it may be more valuable to gauge the rate at which the earnings are moving on average every year. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of Axway Software’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 13%. This means that, we can expect Axway Software will grow its earnings by 13% every year for the next couple of years.

Next Steps:

For Axway Software, there are three key factors 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. Valuation: What is AXW 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 AXW is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AXW? 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.