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The latest earnings update Heliospectra AB (publ) (STO:HELIO) released in December 2018 suggested company earnings became less negative compared to the previous year's level - great news for investors Below is a brief commentary on my key takeaways on how market analysts perceive Heliospectra's earnings growth outlook over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Market analysts' prospects for this coming year seems relatively unexciting, with earnings continuing to flop around in the negative territory, arriving at -kr32.0m in 2020. In addition, earnings are expected to fall further in the following year, dwindling to -kr20.0m in 2021 and -kr4.0m in 2022.
Although it’s helpful to understand the rate of growth year by year relative to today’s figure, it may be more valuable to evaluate the rate at which the company is rising or falling every year, on average. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of Heliospectra's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've inserted 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 45%. This means that, we can anticipate Heliospectra will grow its earnings by 45% every year for the next few years.
For Heliospectra, there are three essential factors you should further research:
- 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.
- Future Earnings: How does HELIO'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.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of HELIO? 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 firstname.lastname@example.org. 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.