Ringmetall AG (FRA:HP3): Is It A Good Long Term Opportunity?
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Ringmetall AG's (FRA:HP3) most recent earnings announcement in December 2018 indicated that the business endured a substantial headwind with earnings declining by -28%. Below, I've presented key growth figures on how market analysts view Ringmetall's earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Ringmetall
Analysts' expectations for next year seems buoyant, with earnings climbing by a robust 26%. This growth seems to continue into the following year with rates reaching double digit 71% compared to today’s earnings, and finally hitting €8.9m by 2022.
Even though it’s helpful to be aware of the growth rate year by year relative to today’s value, it may be more valuable to estimate the rate at which the company is moving every year, on average. The advantage of this method is that we can get a better picture of the direction of Ringmetall's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've appended 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 21%. This means, we can expect Ringmetall will grow its earnings by 21% every year for the next few years.
Next Steps:
For Ringmetall, I've compiled three relevant factors 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 HP3 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 HP3 is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of HP3? 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.
