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What Should We Expect From BE Semiconductor Industries N.V.’s (AMS:BESI) Earnings Over The Next Few Years?

Simply Wall St

The latest earnings update BE Semiconductor Industries N.V. (AMS:BESI) released in December 2018 signalled that the business experienced a significant headwind with earnings falling by -21%. Below is my commentary, albeit very simple and high-level, on how market analysts predict BE Semiconductor Industries’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.

Check out our latest analysis for BE Semiconductor Industries

Market analysts’ prospects for the coming year seems pessimistic, with earnings decreasing by a double-digit -22%. Over the medium term, earnings will begin to improve, expanding year on year, and reaching €150m by 2022.

ENXTAM:BESI Past and Future Earnings, February 28th 2019

Although it’s useful to be aware of the growth year by year relative to today’s value, it may be more valuable to gauge the rate at which the company is rising or falling every year, on average. The pro of this method is that we can get a bigger picture of the direction of BE Semiconductor Industries’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 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 7.8%. This means that, we can assume BE Semiconductor Industries will grow its earnings by 7.8% every year for the next couple of years.

Next Steps:

For BE Semiconductor Industries, there are three pertinent 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 BESI 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 BESI is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BESI? 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.