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In December 2018, Linedata Services S.A. (EPA:LIN) announced its most recent earnings update, which indicated that the business endured a slight headwind with earnings deteriorating from €20m to €20m, a change of -0.7%. Investors may find it useful to understand how market analysts predict Linedata Services's earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Linedata Services
Analysts' expectations for next year seems pessimistic, with earnings decreasing by -0.1%. But in the following year, there is a complete contrast in performance, with arriving at double digit 3.6% compared to today’s level and continues to increase to €22m in 2022.
Even though it is helpful to be aware of the rate of growth each year relative to today’s value, it may be more valuable analyzing the rate at which the business is growing every year, on average. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of Linedata Services'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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 3.6%. This means, we can presume Linedata Services will grow its earnings by 3.6% every year for the next few years.
Next Steps:
For Linedata Services, there are three essential factors you should further examine:
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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 LIN 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 LIN 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 LIN? 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.