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DistIT AB (publ) (STO:DIST): Poised For Long Term Success?

Looking at DistIT AB (publ)'s (STO:DIST) earnings update in December 2018, it seems that analyst forecasts are substantially optimistic, with profits predicted to ramp up by an impressive 62% next year, relative to the historical 5-year average growth rate of 11%. With trailing-twelve-month net income at current levels of kr40m, we should see this rise to kr65m 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.

Check out our latest analysis for DistIT

How is DistIT going to perform in the near future?

The 1 analysts covering DIST 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. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of DIST's earnings growth over these next few years.

OM:DIST Past and Future Earnings, April 19th 2019
OM:DIST Past and Future Earnings, April 19th 2019

This results in an annual growth rate of 18% based on the most recent earnings level of kr40m to the final forecast of kr76m by 2022. EPS reaches SEK6.2 in the final year of forecast compared to the current SEK3.27 EPS today. Margins are currently sitting at 1.8%, which is expected to expand to 2.9% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For DistIT, there are 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 DistIT 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 DistIT is currently mispriced by the market.

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