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TKH Group N.V.’s (AMS:TWEKA) latest earnings announcement in December 2018 suggested that the business benefited from a strong tailwind, leading to a double-digit earnings growth of 26%. Below, I’ve presented key growth figures on how market analysts predict TKH Group’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.
Market analysts’ prospects for the upcoming year seems optimistic, with earnings climbing by a robust 14%. This growth seems to continue into the following year with rates arriving at double digit 29% compared to today’s earnings, and finally hitting €159m by 2022.
While it’s useful to understand the growth year by year relative to today’s level, it may be more beneficial to determine the rate at which the earnings are moving every year, on average. The pro of this technique is that we can get a better picture of the direction of TKH Group’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 13%. This means, we can assume TKH Group will grow its earnings by 13% every year for the next few years.
For TKH Group, there are three essential 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 TWEKA 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 TWEKA is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of TWEKA? 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.