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Wacker Neuson SE's (FRA:WAC) most recent earnings update in December 2018 signalled that the company experienced a large tailwind, leading to a high double-digit earnings growth of 65%. Below, I've presented key growth figures on how market analysts predict Wacker Neuson's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Analysts' outlook for the upcoming year seems pessimistic, with earnings reducing by a double-digit -17%. Over the medium term, earnings will begin to improve, climbing year on year, and generating €156m by 2022.
While it is useful to understand the growth rate year by year relative to today’s value, it may be more insightful to gauge the rate at which the earnings are moving on average every year. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Wacker Neuson's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put 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 3.2%. This means, we can anticipate Wacker Neuson will grow its earnings by 3.2% every year for the next few years.
For Wacker Neuson, I've put together three essential 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 WAC 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 WAC is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of WAC? 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 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.