Naturhouse Health, S.A.'s (BME:NTH) latest earnings announcement in December 2018 indicated that the business faced a significant headwind with earnings declining by -23%. Today I want to provide a brief commentary on how market analysts view Naturhouse Health's earnings growth outlook over the next couple of years and whether the future looks brighter. 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.
Market analysts' prospects for next year seems pessimistic, with earnings falling by -3.0%. In the next couple of years, earnings are predicted to continue to be below today's level, with a decrease of -2.4% in 2021, eventually reaching €15m in 2022.
While it is helpful to be aware of the growth rate year by year relative to today’s value, it may be more beneficial evaluating the rate at which the earnings are rising or falling on average every year. The benefit of this method is that we can get a better picture of the direction of Naturhouse Health's earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute 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 -0.9%. This means, we can expect Naturhouse Health will chip away at a rate of -0.9% every year for the next couple of years.
For Naturhouse Health, I've put together three important aspects you should look at:
- 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 NTH 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 NTH is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of NTH? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.