What Are Analysts Expecting From freenet AG (FRA:FNTN) In The Year Ahead?
In December 2017, freenet AG (DB:FNTN) announced its latest earnings update. Overall, analyst consensus outlook seem pessimistic, with profits predicted to drop by -16.79% next year compared with the past 5-year average growth rate of 8.72%. With net income at current levels of €286.67M, the consensus growth rate suggests that earnings will decline to €238.53M by 2019. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here. Check out our latest analysis for freenet
Exciting times ahead?
Longer term expectations from the 14 analysts covering FNTN’s stock is one of negative sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for FNTN, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of -3.80% based on the most recent earnings level of €286.67M to the final forecast of €254.32M by 2021. This leads to an EPS of €2.04 in the final year of projections relative to the current EPS of €2.24. The primary reason for earnings contraction is due to a falling top-line, with negative growth of -1.13%. Furthermore, the current 8.13% margin is expected to contract to 7.59% by the end of 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For freenet, there are three essential factors 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 freenet 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 freenet is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of freenet? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
