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Atento S.A. (NYSE:ATTO): Poised For Long Term Success?

Simply Wall St

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In December 2018, Atento S.A. (NYSE:ATTO) announced its earnings update. Overall, analysts seem extremely confident, as a 68% rise in profits is expected in the upcoming year, against the historical 5-year average growth rate of 2.5%. By 2020, we can expect Atento’s bottom line to reach US$31m, a jump from the current trailing-twelve-month of US$19m. 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.

See our latest analysis for Atento

What can we expect from Atento in the longer term?

The 7 analysts covering ATTO view its longer term outlook with a positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for ATTO, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NYSE:ATTO Past and Future Earnings, May 10th 2019

This results in an annual growth rate of 27% based on the most recent earnings level of US$19m to the final forecast of US$41m by 2022. EPS reaches $0.55 in the final year of forecast compared to the current $0.25 EPS today. In 2022, ATTO's profit margin will have expanded from 1.0% to 2.3%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Atento, I've put together three fundamental 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 Atento 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 Atento is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Atento? 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.