freenet AG (FRA:FNTN): Should The Future Outlook Worry You?
Based on freenet AG's (FRA:FNTN) earnings update in March 2019, analyst forecasts appear to be pessimistic, as a 5.6% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 1.3%. Currently with a trailing-twelve-month profit of €223m, the consensus growth rate suggests that earnings will drop to €211m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for freenet in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
View our latest analysis for freenet
What can we expect from freenet in the longer term?
Over the next three years, it seems the consensus view of the 10 analysts covering FNTN is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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.
By 2022, FNTN's earnings should reach €221m, from current levels of €223m, resulting in an annual growth rate of 2.1%. EPS reaches €1.78 in the final year of forecast compared to the current €1.74 EPS today. Margins are currently sitting at 7.6%, which is expected to expand to 7.6% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For freenet, there are three key factors 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 freenet 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 freenet is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of freenet? 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.
