We Think Rejlers' (STO:REJL B) Profit Is Only A Baseline For What They Can Achieve

Even though Rejlers AB (publ)'s (STO:REJL B) recent earnings release was robust, the market didn't seem to notice. Our analysis suggests that investors might be missing some promising details.

We've discovered 1 warning sign about Rejlers. View them for free.

The Impact Of Unusual Items On Profit

To properly understand Rejlers' profit results, we need to consider the kr65m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. If Rejlers doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Rejlers' Profit Performance

Unusual items (expenses) detracted from Rejlers' earnings over the last year, but we might see an improvement next year. Because of this, we think Rejlers' earnings potential is at least as good as it seems, and maybe even better! And the EPS is up 57% annually, over the last three years. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. If you'd like to know more about Rejlers as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 1 warning sign for Rejlers and you'll want to know about it.

Today we've zoomed in on a single data point to better understand the nature of Rejlers' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.