Gr. Sarantis S.A. (ATH:SAR): Will The Growth Last?

Gr. Sarantis S.A.’s (ATH:SAR) released its most recent earnings update in December 2018, which indicated that the company experienced a robust tailwind, eventuating to a double-digit earnings growth of 14%. Below, I’ve presented key growth figures on how market analysts predict Gr. Sarantis’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Gr. Sarantis

Analysts’ expectations for the coming year seems positive, with earnings expanding by a robust 13%. This growth seems to continue into the following year with rates arriving at double digit 25% compared to today’s earnings, and finally hitting €47m by 2022.

ATSE:SAR Past and Future Earnings, April 21st 2019
ATSE:SAR Past and Future Earnings, April 21st 2019

Although it is helpful to understand the rate of growth each year relative to today’s level, it may be more beneficial evaluating the rate at which the company is rising or falling on average every year. The advantage of this method is that it ignores near term flucuations and accounts for the overarching direction of Gr. Sarantis’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended 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 12%. This means, we can presume Gr. Sarantis will grow its earnings by 12% every year for the next few years.

Next Steps:

For Gr. Sarantis, 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 SAR 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 SAR is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SAR? 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.