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On 30 September 2018, DATAGROUP SE (FRA:D6H) released its earnings update. Generally, analyst forecasts seem fairly subdued, with earnings expected to grow by 9.9% in the upcoming year relative to the higher past 5-year average growth rate of 42%. Currently with trailing-twelve-month earnings of €13m, we can expect this to reach €14m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Check out our latest analysis for DATAGROUP
Can we expect DATAGROUP to keep growing?
The view from 2 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of D6H’s earnings growth over these next few years.
By 2022, D6H’s earnings should reach €19m, from current levels of €13m, resulting in an annual growth rate of 14%. EPS reaches €2.3 in the final year of forecast compared to the current €1.55 EPS today. With a current profit margin of 4.7%, this movement will result in a margin of 6.1% by 2022.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For DATAGROUP, there are three relevant factors 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 DATAGROUP 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 DATAGROUP 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 DATAGROUP? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.