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dormakaba Holding AG (VTX:DOKA): Is It A Smart Long Term Opportunity?

Simply Wall St

On 30 June 2019, dormakaba Holding AG (VTX:DOKA) released its earnings update. Generally, analyst consensus outlook appear cautiously subdued, as a 8.5% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 11%. Currently with trailing-twelve-month earnings of CHF132m, we can expect this to reach CHF143m by 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 dormakaba Holding

Exciting times ahead?

The longer term expectations from the 10 analysts of DOKA is tilted 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. 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 DOKA's earnings growth over these next few years.

SWX:DOKA Past and Future Earnings, September 15th 2019

This results in an annual growth rate of 8.1% based on the most recent earnings level of CHF132m to the final forecast of CHF165m by 2022. This leads to an EPS of CHF39.47 in the final year of projections relative to the current EPS of CHF31.63. Margins are currently sitting at 4.7%, which is expected to expand to 5.5% by 2022.

Next Steps:

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