Nordic Semiconductor ASA’s (OB:NOD) announced its latest earnings update in December 2017, which showed that the company benefited from a small tailwind, leading to a single-digit earnings growth of 5.28%. Today I want to provide a brief commentary on how market analysts predict Nordic Semiconductor’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. See our latest analysis for Nordic Semiconductor
Analysts’ expectations for this coming year seems positive, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally arriving at US$67.48M in 2021.
Even though it is useful to understand the growth year by year relative to today’s level, it may be more insightful gauging the rate at which the company is moving on average every year. The pro of this technique is that we can get a better picture of the direction of Nordic Semiconductor’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 65.25%. This means that, we can expect Nordic Semiconductor will grow its earnings by 65.25% every year for the next few years.
Next Steps:
For Nordic Semiconductor, I’ve compiled 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 NOD 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 NOD 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 NOD? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.