RIB Software SE (FRA:RIB): Immense Growth Potential?
Looking at RIB Software SE's (FRA:RIB) earnings update on 31 December 2018, analyst consensus outlook appear cautiously subdued, as a -15% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 7.5%. Currently with trailing-twelve-month earnings of €21m, we can expect this to reach €18m by 2020. Below is a brief commentary around RIB Software's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
View our latest analysis for RIB Software
What can we expect from RIB Software in the longer term?
Over the next three years, it seems the consensus view of the 4 analysts covering RIB is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. 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.
By 2022, RIB's earnings should reach €26m, from current levels of €21m, resulting in an annual growth rate of 12%. This leads to an EPS of €0.65 in the final year of projections relative to the current EPS of €0.43. However, the near term margins may change heading into 2022, from the current levels of 16% to 13%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For RIB Software, there are three pertinent 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 RIB Software 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 RIB Software is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of RIB Software? 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.
