The latest earnings release Lindab International AB’s (STO:LIAB) announced in December 2018 signalled that the business experienced a robust tailwind, eventuating to a double-digit earnings growth of 14%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Lindab International’s earnings growth outlook over the next couple of 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.
Analysts’ expectations for this coming year seems optimistic, with earnings growing by a robust 33%. This growth seems to continue into the following year with rates reaching double digit 39% compared to today’s earnings, and finally hitting kr591m by 2022.
Although it’s informative understanding the growth each year relative to today’s figure, it may be more valuable to analyze the rate at which the company is moving on average every year. The pro of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Lindab International’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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 12%. This means that, we can anticipate Lindab International will grow its earnings by 12% every year for the next few years.
For Lindab International, I’ve compiled three fundamental 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 LIAB 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 LIAB is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of LIAB? 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.