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How Do Analysts See NetEnt AB (publ) (STO:NET B) Performing In The Years Ahead?

Simply Wall St

NetEnt AB (publ)'s (STO:NET B) latest earnings update in December 2018 confirmed that the business experienced a slight tailwind, eventuating to a single-digit earnings growth of 5.5%. Below is a brief commentary on my key takeaways on how market analysts perceive NetEnt's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for NetEnt

Market analysts' prospects for this coming year seems rather muted, with earnings growing by a single digit 0.04%. The following year doesn't look much more exciting, though earnings does reach kr690m in 2022.

OM:NET B Past and Future Earnings, April 21st 2019

Although it’s informative knowing the growth each year relative to today’s level, it may be more valuable gauging the rate at which the earnings are rising or falling every year, on average. The advantage of this approach is that we can get a better picture of the direction of NetEnt'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 5.9%. This means, we can anticipate NetEnt will grow its earnings by 5.9% every year for the next couple of years.

Next Steps:

For NetEnt, I've put together three fundamental aspects you should look at:

  1. 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.
  2. Valuation: What is NET B 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 NET B is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of NET B? 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.