Amplifon SpA’s ( BIT:AMP ) released its most recent earnings update in December 2018, which indicated that the business experienced a minor headwind with earnings falling from €101m to €100m, a change of -0.2%. Below is a brief commentary on my key takeaways on how market analysts view Amplifon’s earnings growth trajectory 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 this coming year seems buoyant, with earnings rising by a robust 17%. This growth seems to continue into the following year with rates arriving at double digit 45% compared to today’s earnings, and finally hitting €175m by 2022.
Although it’s informative knowing the growth rate year by year relative to today’s value, it may be more insightful to evaluate the rate at which the company is rising or falling on average every year. The pro of this method is that we can get a bigger picture of the direction of Amplifon’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. 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 18%. This means that, we can assume Amplifon will grow its earnings by 18% every year for the next couple of years.
For Amplifon, I’ve put together three essential aspects 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 AMP 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 AMP is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of AMP? 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 email@example.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.