How Do Analysts See Axactor AB (publ) (OB:AXA) Performing Over The Next Few Years?

The most recent earnings release Axactor AB (publ)’s (OB:AXA) announced in December 2017 confirmed that the company finally turned profitable after losses on average over the past couple of years. Below is my commentary, albeit very simple and high-level, on how market analysts view Axactor’s earnings growth trajectory over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View our latest analysis for Axactor

Analysts’ expectations for next year seems positive, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally arriving at €82.68M in 2021.

OB:AXA Future Profit May 2nd 18
OB:AXA Future Profit May 2nd 18

Even though it is helpful to understand the growth rate year by year relative to today’s figure, it may be more valuable gauging the rate at which the earnings are moving on average every year. The benefit of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Axactor’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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 53.37%. This means that, we can expect Axactor will grow its earnings by 53.37% every year for the next couple of years.

Next Steps:

For Axactor, I’ve put together three fundamental 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 AXA 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 AXA is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AXA? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!