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The most recent earnings update Dassault Systèmes SE’s (EPA:DSY) released in December 2018 showed that the company gained from a slight tailwind, leading to a single-digit earnings growth of 9.6%. Below, I’ve laid out key numbers on how market analysts perceive Dassault Systèmes’s earnings growth trajectory 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 Dassault Systèmes
Analysts’ outlook for this coming year seems buoyant, with earnings growing by a robust 19%. This growth seems to continue into the following year with rates reaching double digit 38% compared to today’s earnings, and finally hitting €880m by 2022.
Although it is informative understanding the rate of growth year by year relative to today’s figure, it may be more insightful to evaluate the rate at which the earnings are growing every year, on average. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of Dassault Systèmes’s earnings trajectory over time, which may be more relevant for long term investors. To calculate 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 14%. This means that, we can anticipate Dassault Systèmes will grow its earnings by 14% every year for the next couple of years.
Next Steps:
For Dassault Systèmes, there are three key aspects you should further research:
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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 DSY 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 DSY 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 DSY? 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. On rare occasion, data errors may occur. Thank you for reading.