AMG Advanced Metallurgical Group N.V. (AMS:AMG): What Are The Future Prospects?
The most recent earnings update AMG Advanced Metallurgical Group N.V.'s (AMS:AMG) released in December 2018 confirmed that the business benefited from a strong tailwind, leading to a high double-digit earnings growth of 66%. Today I want to provide a brief commentary on how market analysts view AMG Advanced Metallurgical Group's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Check out our latest analysis for AMG Advanced Metallurgical Group
Analysts' expectations for next year seems buoyant, with earnings expanding by a robust 33%. This growth seems to continue into the following year with rates reaching double digit 51% compared to today’s earnings, and finally hitting US$170m by 2022.
While it’s informative knowing the growth rate each year relative to today’s level, it may be more insightful determining the rate at which the business is growing every year, on average. The benefit of this technique is that we can get a bigger picture of the direction of AMG Advanced Metallurgical Group's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put 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 15%. This means that, we can anticipate AMG Advanced Metallurgical Group will grow its earnings by 15% every year for the next couple of years.
Next Steps:
For AMG Advanced Metallurgical Group, there are three important aspects you should further examine:
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.
Valuation: What is AMG 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 AMG is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AMG? 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.
