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On 31 March 2019, Probi AB (publ) (STO:PROB) released its earnings update. Generally, analyst forecasts seem fairly subdued, as a 8.0% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 20%. With trailing-twelve-month net income at current levels of kr76m, we should see this rise to kr82m in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Probi in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
View our latest analysis for Probi
Can we expect Probi to keep growing?
The longer term view from the 2 analysts covering PROB is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of kr76m and the final forecast of kr140m by 2022, the annual rate of growth for PROB’s earnings is 13%. This leads to an EPS of SEK13.16 in the final year of projections relative to the current EPS of SEK6.69. With a current profit margin of 13%, this movement will result in a margin of 16% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Probi, I've put together three fundamental factors 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 Probi 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 Probi 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 Probi? 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.