What Should We Expect From 11 bit studios S.A.’s (WSE:11B) Earnings In The Next 12 Months?

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In September 2018, 11 bit studios S.A. (WSE:11B) released its earnings update. Generally, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by 0.3% in the upcoming year against the higher past 5-year average growth rate of 30%. Currently with trailing-twelve-month earnings of zł3.6m, we can expect this to reach zł3.6m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for 11 bit studios 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 11 bit studios

Exciting times ahead?

The longer term view from the 5 analysts covering 11B is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for 11B, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

WSE:11B Future Profit February 5th 19
WSE:11B Future Profit February 5th 19

From the current net income level of zł3.6m and the final forecast of zł7.6m by 2022, the annual rate of growth for 11B’s earnings is 19%. This leads to an EPS of PLN30.07 in the final year of projections relative to the current EPS of PLN1.58. In 2022, 11B’s profit margin will have expanded from 19% to 24%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For 11 bit studios, I’ve compiled three important 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 11 bit studios 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 11 bit studios is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of 11 bit studios? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.