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How Do Analysts See Veoneer, Inc. (NYSE:VNE) Performing In The Next Couple Of Years?

Simply Wall St

In December 2018, Veoneer, Inc. (NYSE:VNE) released its most recent earnings announcement, which signalled company earnings became less negative compared to the previous year's level - great news for investors Investors may find it useful to understand how market analysts perceive Veoneer's earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Veoneer

Market analysts' prospects for the upcoming year seems pessimistic, with earnings becoming even more negative, reaching -US$324.9m in 2020. In addition, earnings should fall off in the following year, dwindling to -US$216.5m in 2021 and -US$110.9m in 2022.

NYSE:VNE Past and Future Earnings, April 17th 2019

While it is informative understanding the rate of growth each year relative to today’s figure, it may be more insightful to gauge the rate at which the business is growing on average every year. The benefit of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Veoneer's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've inserted 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 39%. This means that, we can assume Veoneer will grow its earnings by 39% every year for the next couple of years.

Next Steps:

For Veoneer, there are three relevant factors you should further examine:

  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 VNE 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 VNE is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of VNE? 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.