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Hypoport AG (FRA:HYQ): Are Analysts Bullish?

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Hypoport AG's (FRA:HYQ) announced its latest earnings update in December 2018, which showed that the company benefited from a strong tailwind, leading to a double-digit earnings growth of 22%. Investors may find it useful to understand how market analysts perceive Hypoport's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

See our latest analysis for Hypoport

Analysts' expectations for the upcoming year seems optimistic, with earnings climbing by a robust 32%. This growth seems to continue into the following year with rates reaching double digit 63% compared to today’s earnings, and finally hitting €44m by 2022.

DB:HYQ Past and Future Earnings, April 9th 2019
DB:HYQ Past and Future Earnings, April 9th 2019

While it is helpful to be aware of the rate of growth year by year relative to today’s level, it may be more beneficial to evaluate the rate at which the business is growing every year, on average. The benefit of this approach is that we can get a bigger picture of the direction of Hypoport's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've inserted 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 22%. This means that, we can presume Hypoport will grow its earnings by 22% every year for the next couple of years.

Next Steps:

For Hypoport, I've put together three pertinent aspects you should further research:

  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 HYQ 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 HYQ is currently mispriced by the market.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of HYQ? 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.