HiQ International AB (publ)’s (STO:HIQ) latest earnings update in December 2018 signalled that the business endured a minor headwind with earnings declining from kr165m to kr152m, a change of -8.1%. Below, I’ve presented key growth figures on how market analysts perceive HiQ International’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 HiQ International
Analysts’ expectations for this coming year seems optimistic, with earnings increasing by a robust 20%. This growth seems to continue into the following year with rates arriving at double digit 30% compared to today’s earnings, and finally hitting kr212m by 2022.
Although it’s informative understanding the growth rate each year relative to today’s value, it may be more beneficial to evaluate the rate at which the company is moving on average every year. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of HiQ International’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 11%. This means, we can presume HiQ International will grow its earnings by 11% every year for the next few years.
Next Steps:
For HiQ International, there are three important aspects 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 HIQ 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 HIQ 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 HIQ? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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