Will KRUK Spólka Akcyjna’s (WSE:KRU) Earnings Grow In The Next 12 Months?

Looking at KRUK Spólka Akcyjna’s (WSE:KRU) earnings update on 31 December 2018, analyst forecasts seem fairly subdued, with profits predicted to rise by 15% next year compared with the higher past 5-year average growth rate of 20%. Currently with trailing-twelve-month earnings of zł330m, we can expect this to reach zł381m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for KRUK Spólka Akcyjna in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for KRUK Spólka Akcyjna

Exciting times ahead?

The view from 6 analysts over the next three years is one of negative sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of KRU’s earnings growth over these next few years.

WSE:KRU Past and Future Earnings, March 15th 2019
WSE:KRU Past and Future Earnings, March 15th 2019

From the current net income level of zł330m and the final forecast of zł269m by 2022, the annual rate of growth for KRU’s earnings is -5.0%. This leads to an EPS of PLN14.22 in the final year of projections relative to the current EPS of PLN17.51. Earnings decline appears to be a result of cost growth exceeding top-line growth of 3.5% in the next three years. With this high cost growth, margins is expected to contract from 28% to 20% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For KRUK Spólka Akcyjna, I’ve put together three essential factors you should further research:

  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 KRUK Spólka Akcyjna 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 KRUK Spólka Akcyjna is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of KRUK Spólka Akcyjna? 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.