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In December 2018, DNA Oyj (HEL:DNA) announced its most recent earnings update, which showed that the business gained from a slight tailwind, leading to a single-digit earnings growth of 9.8%. Below, I’ve laid out key numbers on how market analysts predict DNA Oyj’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Analysts’ expectations for the upcoming year seems rather muted, with earnings expanding by a single digit 7.7%. The growth outlook in the following year seems much more positive with rates arriving at double digit 18% compared to today’s earnings, and finally hitting €122m by 2022.
Even though it’s helpful to understand the growth each year relative to today’s figure, it may be more insightful to analyze the rate at which the company is rising or falling on average every year. The advantage of this approach is that it ignores near term flucuations and accounts for the overarching direction of DNA Oyj’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 6.5%. This means that, we can presume DNA Oyj will grow its earnings by 6.5% every year for the next few years.
For DNA Oyj, there are three fundamental aspects you should further research:
- 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 DNA 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 DNA is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of DNA? 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 past 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. For errors that warrant correction please contact the editor at email@example.com.