Yahoo Finance What Are Analysts Saying About The Future Of Software Aktiengesellschaft’s (ETR:SOW)?
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As Software Aktiengesellschaft (ETR:SOW) announced its recent earnings release on 31 December 2018, it seems that analyst forecasts are fairly bearish, with earnings expected to decline by -1.9% in the upcoming year compared with the past 5-year average growth rate of 5.9%. Currently with a trailing-twelve-month profit of €165m, the consensus growth rate suggests that earnings will drop to €162m by 2020. Below is a brief commentary on the longer term outlook the market has for Software. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
See our latest analysis for Software
How is Software going to perform in the near future?
The longer term expectations from the 17 analysts of SOW is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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.
From the current net income level of €165m and the final forecast of €182m by 2022, the annual rate of growth for SOW’s earnings is 3.9%. EPS reaches €2.34 in the final year of forecast compared to the current €2.23 EPS today. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 19% to 19% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Software, I’ve compiled three essential 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 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 Software is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of 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. On rare occasion, data errors may occur. Thank you for reading.
