In December 2017, Atos SE (ENXTPA:ATO) announced its latest earnings update, which signalled that the company benefited from a small tailwind, leading to a single-digit earnings growth of 3.78%. Below, I’ve laid out key numbers on how market analysts view Atos’s earnings growth trajectory over the next couple of 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. See our latest analysis for Atos
Analysts’ expectations for the upcoming year seems buoyant, with earnings increasing by a robust 14.30%. This growth seems to continue into the following year with rates reaching double digit 31.71% compared to today’s earnings, and finally hitting €843.55M by 2021.
Even though it is helpful to be aware of the growth each year relative to today’s figure, it may be more insightful to determine the rate at which the earnings are moving on average every year. The advantage of this technique is that we can get a bigger picture of the direction of Atos’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 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 11.63%. This means, we can assume Atos will grow its earnings by 11.63% every year for the next few years.
For Atos, there are 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 ATO 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 ATO is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ATO? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.