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The most recent earnings announcement Fondia Oyj’s (HLSE:FONDIA) released in December 2017 revealed that the company endured a slight headwind with earnings falling from €1.52M to €1.49M, a change of -1.42%. Below is a brief commentary on my key takeaways on how market analysts perceive Fondia Oyj’s earnings growth outlook over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. View our latest analysis for Fondia Oyj
Analysts’ outlook for next year seems positive, with earnings growing by a significant 67.29%. This high growth in earnings is expected to continue, bringing the bottom line up to €3.30M by 2021.
Even though it’s informative knowing the growth year by year relative to today’s level, it may be more insightful to analyze the rate at which the company is growing every year, on average. The pro of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Fondia Oyj’s earnings trajectory over time, which may be more relevant for long term investors. To compute 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 22.82%. This means that, we can expect Fondia Oyj will grow its earnings by 22.82% every year for the next couple of years.
Next Steps:
For Fondia Oyj, I’ve put together three important 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 FONDIA 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 FONDIA 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 FONDIA? 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.