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What Should You Know About The Future Of adesso AG’s (FRA:ADN1)?

Dale Lombardi

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In June 2018, adesso AG (FRA:ADN1) released its earnings update. Generally, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by 16% in the upcoming year compared with the higher past 5-year average growth rate of 34%. By 2020, we can expect adesso’s bottom line to reach €13m, a jump from the current trailing-twelve-month of €11m. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for adesso in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

Check out our latest analysis for adesso

Can we expect adesso to keep growing?

Longer term expectations from the 2 analysts covering ADN1’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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.

DB:ADN1 Future Profit February 18th 19

This results in an annual growth rate of 17% based on the most recent earnings level of €11m to the final forecast of €19m by 2022. EPS reaches €3.89 in the final year of forecast compared to the current €1.79 EPS today. In 2022, ADN1’s profit margin will have expanded from 3.4% to 4.5%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For adesso, I’ve put together three fundamental 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. Valuation: What is adesso 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 adesso is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of adesso? 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. On rare occasion, data errors may occur. Thank you for reading.