In This Article:
As Melexis NV (EBR:MELE) released its latest earnings announcement on 30 June 2019, analyst forecasts appear to be pessimistic, with earnings expected to decline by 10% in the upcoming year relative to the past 5-year average growth rate of 5.5%. Presently, with latest-twelve-month earnings at €115m, we should see this fall to €104m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Melexis in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for Melexis
Can we expect Melexis to keep growing?
The view from 8 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. To understand the overall trajectory of MELE's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of €115m and the final forecast of €170m by 2022, the annual rate of growth for MELE’s earnings is 21%. This leads to an EPS of €3.2 in the final year of projections relative to the current EPS of €2.86. With a current profit margin of 20%, this movement will result in a margin of 23% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Melexis, there are three key aspects 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 Melexis 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 Melexis 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 Melexis? 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.