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What Should Investors Know About The Future Of ORPEA Société Anonyme's (EPA:ORP)?

Simply Wall St

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In December 2018, ORPEA Société Anonyme (EPA:ORP) announced its most recent earnings update, which indicated that the business gained from a major tailwind, more than doubling its earnings from the prior year. Below is a brief commentary on my key takeaways on how market analysts predict ORPEA Société Anonyme's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. 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.

See our latest analysis for ORPEA Société Anonyme

Analysts' outlook for next year seems optimistic, with earnings rising by a robust 12%. This growth seems to continue into the following year with rates reaching double digit 28% compared to today’s earnings, and finally hitting €311m by 2022.

ENXTPA:ORP Past and Future Earnings, April 9th 2019

While it’s informative understanding the growth rate each year relative to today’s level, it may be more valuable to evaluate the rate at which the company is moving every year, on average. The benefit of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of ORPEA Société Anonyme's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 12%. This means that, we can assume ORPEA Société Anonyme will grow its earnings by 12% every year for the next few years.

Next Steps:

For ORPEA Société Anonyme, there are three pertinent aspects you should further examine:

  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. Future Earnings: How does ORP's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ORP? 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.