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What Should Investors Know About Iren SpA's (BIT:IRE) Earnings Outlook?

Simply Wall St

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The most recent earnings release Iren SpA's (BIT:IRE) announced in December 2018 suggested that the business experienced a slight tailwind, eventuating to a single-digit earnings growth of 1.8%. Below, I've laid out key growth figures on how market analysts view Iren'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.

Check out our latest analysis for Iren

Market analysts' prospects for next year seems pessimistic, with earnings falling by -0.08%. But in the following year, there is a complete contrast in performance, with generating double digit 6.3% compared to today’s level and continues to increase to €267m in 2022.

BIT:IRE Past and Future Earnings, May 3rd 2019

While it’s useful to understand the growth rate year by year relative to today’s figure, it may be more beneficial determining the rate at which the company is rising or falling every year, on average. The advantage of this technique is that we can get a bigger picture of the direction of Iren'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 appended 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 4.3%. This means, we can assume Iren will grow its earnings by 4.3% every year for the next few years.

Next Steps:

For Iren, I've put together three key aspects 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 IRE 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 IRE is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of IRE? 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.