The most recent earnings announcement Vicat SA's (EPA:VCT) released in December 2018 showed that the company benefited from a small tailwind, eventuating to a single-digit earnings growth of 6.3%. Below, I've laid out key growth figures on how market analysts perceive Vicat's earnings growth outlook over the next few 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.
Market analysts' prospects for next year seems positive, with earnings expanding by a robust 12%. This growth seems to continue into the following year with rates arriving at double digit 27% compared to today’s earnings, and finally hitting €204m by 2022.
While it is useful to understand the rate of growth each year relative to today’s figure, it may be more beneficial to estimate the rate at which the earnings are growing every year, on average. The advantage of this technique is that it ignores near term flucuations and accounts for the overarching direction of Vicat's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 11%. This means that, we can anticipate Vicat will grow its earnings by 11% every year for the next couple of years.
For Vicat, I've put together three pertinent factors you should further research:
- 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 VCT 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 VCT is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of VCT? 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 firstname.lastname@example.org. 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.