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AST Groupe (EPA:ASP): Poised For Long Term Success?

Simply Wall St

Looking at AST Groupe's (EPA:ASP) earnings update on 31 December 2018, it seems that analyst expectations are fairly bearish, as a 2.2% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 57%. With trailing-twelve-month net income at current levels of €8.0m, we should see this rise to €8.2m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

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Check out our latest analysis for AST Groupe

Exciting times ahead?

The view from 1 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

ENXTPA:ASP Past and Future Earnings, May 21st 2019

This results in an annual growth rate of 12% based on the most recent earnings level of €8.0m to the final forecast of €11m by 2022. EPS reaches €0.87 in the final year of forecast compared to the current €0.62 EPS today. In 2022, ASP's profit margin will have expanded from 3.6% to 4.8%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For AST Groupe, I've compiled three important aspects you should further research:

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