Will CEVA Inc’s (CEVA) Earnings Grow In The Year Ahead?
CEVA Inc (NASDAQ:CEVA)’s impressive earnings growth per share is expected to be a big double-digit 71.52% over the next three years. With the recent EPS being $0.778, expected growth will push the upcoming EPS to $1.334. I am going to look at the latest data on CEVA to assess whether this expected growth is reasonable. View our latest analysis for CEVA
Can we expect CEVA to keep growing?
According to the analysts covering the company, in a few years should bring some good growth prospects for CEVA. Expectation from the stock’s 6 analysts is one of positive sentiment, with earnings estimated to grow from current levels of $0.778 to $1.334 over the next couple of years. This illustrates a relatively optimistic outlook in the near term, with a relatively solid earnings per share growth rate of 71.52% over the next few years. In the same period and profit is predicted to grow from $17M to $28M in the next couple of years, growing by 71.52%. However, margins look rather unappealing at the current levels of revenue and earnings.
Basis for the growth
The past can be a great indicator for future performance for a stock. We can determine whether this level of expected growth is highly excessive or whether the company has consistently exhibited strength. However, CEVA’s earnings growth in the past couple of years has been negative at -52.07%. Although its past performance is not supportive of a positive growth trend, it could also mean CEVA is growing off a lower base, meaning a higher growth rate is easier to achieve. This sign change in growth could indicate a turnaround initiative.
Next Steps:
For CEVA, 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 CEVA 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 CEVA is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CEVA? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
