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The latest earnings release Romande Energie Holding SA's (VTX:HREN) announced in December 2018 suggested that the company experienced a significant headwind with earnings falling by -56%. Below, I've laid out key numbers on how market analysts view Romande Energie Holding's earnings growth outlook over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Romande Energie Holding
Market analysts' prospects for this coming year seems positive, with earnings growing by a robust 37%. This growth seems to continue into the following year with rates reaching double digit 76% compared to today’s earnings, and finally hitting CHF96m by 2022.
Although it is helpful to understand the growth rate each year relative to today’s value, it may be more valuable to determine the rate at which the business is rising or falling every year, on average. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Romande Energie Holding'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%. This means, we can presume Romande Energie Holding will grow its earnings by 22% every year for the next few years.
Next Steps:
For Romande Energie Holding, I've put together three fundamental 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 HREN 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 HREN 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 HREN? 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. Thank you for reading.