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Econocom Group SE (EBR:ECONB): What We Can Expect From This Growth Stock

Simply Wall St

Based on Econocom Group SE's (EBR:ECONB) earnings update in December 2018, analyst consensus outlook appear cautiously optimistic, as a 40% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 5.5%. Currently with trailing-twelve-month earnings of €39m, we can expect this to reach €55m by 2020. Below is a brief commentary around Econocom Group's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

See our latest analysis for Econocom Group

What can we expect from Econocom Group in the longer term?

Longer term expectations from the 5 analysts covering ECONB’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

ENXTBR:ECONB Past and Future Earnings, September 7th 2019

This results in an annual growth rate of 20% based on the most recent earnings level of €39m to the final forecast of €73m by 2022. EPS reaches €0.32 in the final year of forecast compared to the current €0.17 EPS today. Margins are currently sitting at 1.4%, which is expected to expand to 2.4% by 2022.

Next Steps:

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