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What Do Analysts Think About GrandVision N.V.'s (AMS:GVNV) Earnings Trajectory?

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The latest earnings announcement GrandVision N.V. (AMS:GVNV) released in December 2018 confirmed that the company endured a minor headwind with earnings deteriorating from €228m to €216m, a change of -5.1%. Below is a brief commentary on my key takeaways on how market analysts predict GrandVision's earnings growth outlook over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

View our latest analysis for GrandVision

Analysts' expectations for the upcoming year seems optimistic, with earnings growing by a robust 15%. This growth seems to continue into the following year with rates reaching double digit 30% compared to today’s earnings, and finally hitting €301m by 2022.

ENXTAM:GVNV Past and Future Earnings, June 3rd 2019
ENXTAM:GVNV Past and Future Earnings, June 3rd 2019

While it is useful to be aware of the growth year by year relative to today’s figure, it may be more beneficial determining the rate at which the business is rising or falling on average every year. The benefit of this method is that we can get a better picture of the direction of GrandVision's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute 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 11%. This means that, we can anticipate GrandVision will grow its earnings by 11% every year for the next few years.

Next Steps:

For GrandVision, there are three important 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 GVNV 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 GVNV is currently mispriced by the market.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of GVNV? 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.

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