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In March 2019, Indra Sistemas, S.A. (BME:IDR) announced its earnings update. Overall, analysts seem cautiously bearish, with profits predicted to rise by 12% next year against the higher past 5-year average growth rate of 33%. Presently, with latest-twelve-month earnings at €120m, we should see this growing to €134m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
How is Indra Sistemas going to perform in the near future?
Over the next three years, it seems the consensus view of the 14 analysts covering IDR is skewed towards the 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.
From the current net income level of €120m and the final forecast of €169m by 2022, the annual rate of growth for IDR’s earnings is 11%. EPS reaches €0.99 in the final year of forecast compared to the current €0.68 EPS today. With a current profit margin of 3.8%, this movement will result in a margin of 5.0% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Indra Sistemas, I've put together three fundamental aspects you should look at:
- 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 Indra Sistemas 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 Indra Sistemas is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Indra Sistemas? 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 firstname.lastname@example.org. 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.