What Should You Know About The Future Of Devoteam SA's (EPA:DVT)?
The latest earnings release Devoteam SA's (EPA:DVT) announced in May 2019 revealed that the company experienced a strong tailwind, eventuating to a high double-digit earnings growth of 70%. Below is a brief commentary on my key takeaways on how market analysts view Devoteam's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for Devoteam
Market analysts' consensus outlook for this coming year seems optimistic, with earnings growing by a robust 20%. This growth seems to continue into the following year with rates reaching double digit 36% compared to today’s earnings, and finally hitting €55m by 2022.
While it is useful to be aware of the growth year by year relative to today’s value, it may be more valuable to determine the rate at which the earnings are rising or falling on average every year. The pro of this method is that we can get a better picture of the direction of Devoteam's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute 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 expect Devoteam will grow its earnings by 12% every year for the next couple of years.
Next Steps:
For Devoteam, I've compiled three essential aspects you should further examine:
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 DVT 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 DVT is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of DVT? 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.
