Evotec AG (ETR:EVT): What Can We Expect From This High Growth Stock?
The latest earnings announcement Evotec AG’s (XTRA:EVT) released in December 2017 confirmed that the business endured a immense headwind with earnings declining by -11.89%. Below is a brief commentary on my key takeaways on how market analysts predict Evotec’s earnings growth outlook over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. View our latest analysis for Evotec
Market analysts’ consensus outlook for this coming year seems buoyant, with earnings climbing by a significant 62.10%. This strong growth in earnings is expected to continue, bringing the bottom line up to €68.45M by 2021.
Even though it’s helpful to be aware of the growth rate each year relative to today’s figure, it may be more valuable analyzing the rate at which the company is moving every year, on average. The advantage of this technique is that we can get a better picture of the direction of Evotec’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 16.48%. This means, we can expect Evotec will grow its earnings by 16.48% every year for the next couple of years.
Next Steps:
For Evotec, I’ve compiled three relevant aspects you should further examine:
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.
Valuation: What is EVT 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 EVT is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of EVT? 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.
