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DATAGROUP SE (ETR:D6H): What We Can Expect From This Growth Stock

Simply Wall St

Since DATAGROUP SE (ETR:D6H) released its earnings in March 2019, it seems that analyst forecasts are fairly optimistic, as a 27% increase in profits is expected in the upcoming year, though this is evidently lower than the historical 5-year average earnings growth of 40%. By 2020, we can expect DATAGROUP’s bottom line to reach €16m, a jump from the current trailing-twelve-month of €13m. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for DATAGROUP in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

Check out our latest analysis for DATAGROUP

Exciting times ahead?

Over the next three years, it seems the consensus view of the 6 analysts covering D6H is skewed towards the 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 D6H, 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.

XTRA:D6H Past and Future Earnings, August 17th 2019

This results in an annual growth rate of 14% based on the most recent earnings level of €13m to the final forecast of €21m by 2022. EPS reaches €2.55 in the final year of forecast compared to the current €1.55 EPS today. With a current profit margin of 4.7%, this movement will result in a margin of 6.2% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For DATAGROUP, I've put together three pertinent factors you should look at:

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