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After Signify N.V.'s (AMS:LIGHT) earnings announcement on 31 December 2018, analysts seem cautiously bearish, as a 2.2% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 16%. Presently, with latest-twelve-month earnings at €263m, we should see this growing to €269m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Signify in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How is Signify going to perform in the near future?
Over the next three years, it seems the consensus view of the 14 analysts covering LIGHT 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.
This results in an annual growth rate of 2.9% based on the most recent earnings level of €263m to the final forecast of €278m by 2022. EPS reaches €2.17 in the final year of forecast compared to the current €1.96 EPS today. Margins are currently sitting at 4.1%, which is expected to expand to 4.6% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Signify, I've compiled three essential aspects 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 Signify 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 Signify is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Signify? 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 email@example.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.
Signify N.V. provides lighting products, systems, and services in Europe, the Americas, and internationally.
The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.
|Analysis Area||Score (0-6)|
Read more about these checks in the individual report sections or in our analysis model.
Undervalued with solid track record.