After Matas A/S's (CPH:MATAS) recent earnings announcement in March 2019, the consensus outlook from analysts appear pessimistic, as a 6.6% fall in profits is expected in the upcoming year. Though this pessimism is not unfounded, given the 5-year track record of negative growth. Currently with a trailing-twelve-month profit of ø263m, the consensus growth rate suggests that earnings will drop to ø246m by 2020. Below is a brief commentary around Matas'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.
Can we expect Matas to keep growing?
The longer term view from the 3 analysts covering MATAS is one of negative sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of MATAS's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of ø263m and the final forecast of ø244m by 2022, the annual rate of growth for MATAS’s earnings is -2.7%. EPS reaches DKK6.37 in the final year of forecast compared to the current DKK6.97 EPS today. The bottom-line decline seems to be caused by top-line expansion of 2.3%, which is predicted to lag cost growth leading up to 2022. Furthermore, the current 7.4% margin is expected to contract to 6.4% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Matas, there are three fundamental aspects 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.
Valuation: What is Matas 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 Matas is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Matas? 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.