Avanza Bank Holding AB (publ)’s (STO:AZA) released its most recent earnings update in December 2018, which suggested that the company experienced a slight tailwind, leading to a single-digit earnings growth of 1.3%. Below, I’ve presented key growth figures on how market analysts predict Avanza Bank Holding’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Analysts’ outlook for the coming year seems optimistic, with earnings growing by a robust 17%. This growth seems to continue into the following year with rates arriving at double digit 43% compared to today’s earnings, and finally hitting kr636m by 2022.
While it is helpful to be aware of the rate of growth year by year relative to today’s figure, it may be more beneficial analyzing the rate at which the business is growing on average every year. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Avanza Bank Holding’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended 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 17%. This means that, we can expect Avanza Bank Holding will grow its earnings by 17% every year for the next few years.
For Avanza Bank Holding, I’ve put together three fundamental factors you should further research:
- 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 AZA 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 AZA is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AZA? 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 firstname.lastname@example.org. 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.