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The latest earnings announcement Sonova Holding AG (VTX:SOON) released in March 2019 indicated that the company experienced a strong tailwind, eventuating to a double-digit earnings growth of 13%. Below, I've laid out key growth figures on how market analysts perceive Sonova Holding's earnings growth outlook 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.
Check out our latest analysis for Sonova Holding
Market analysts' consensus outlook for this coming year seems optimistic, with earnings increasing by a robust 17%. This growth seems to continue into the following year with rates arriving at double digit 27% compared to today’s earnings, and finally hitting CHF637m by 2022.
While it’s informative knowing the growth rate each year relative to today’s figure, it may be more insightful gauging the rate at which the earnings are growing on average every year. The pro of this method is that we can get a better picture of the direction of Sonova Holding's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 8.8%. This means that, we can assume Sonova Holding will grow its earnings by 8.8% every year for the next couple of years.
Next Steps:
For Sonova Holding, there are three pertinent factors you should look at:
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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.
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Valuation: What is SOON 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 SOON is currently mispriced by the market.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SOON? 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.