In December 2018, Sandnes Sparebank (OB:SADG) released its most recent earnings announcement, which indicated that the business benefited from a robust tailwind, leading to a double-digit earnings growth of 24%. Below, I’ve laid out key numbers on how market analysts perceive Sandnesrebank’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts’ outlook for the upcoming year seems positive, with earnings increasing by a robust 43%. This growth seems to continue into the following year with rates reaching double digit 50% compared to today’s earnings, and finally hitting øre262m by 2022.
Although it is informative knowing the growth rate year by year relative to today’s level, it may be more insightful to gauge the rate at which the earnings are moving every year, on average. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of Sandnesrebank’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve inserted 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 16%. This means, we can assume Sandnesrebank will grow its earnings by 16% every year for the next few years.
For Sandnesrebank, I’ve put together three fundamental aspects 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 SADG 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 SADG is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SADG? 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.