Will Cembra Money Bank AG’s (VTX:CMBN) Earnings Grow In The Next Couple Of Years?

The latest earnings release Cembra Money Bank AG’s (SWX:CMBN) announced in December 2017 showed that the company gained from a small tailwind, eventuating to a single-digit earnings growth of 0.55%. Investors may find it useful to understand how market analysts view Cembra Money Bank’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. See our latest analysis for Cembra Money Bank

Market analysts’ consensus outlook for the coming year seems rather muted, with earnings rising by a single digit 0.48%. The following year doesn’t look much more exciting, though earnings does reach CHF155.18M in 2021.

SWX:CMBN Future Profit May 28th 18

While it is useful to be aware of the growth rate each year relative to today’s value, it may be more valuable to analyze the rate at which the business is moving every year, on average. The pro of this method is that we can get a better picture of the direction of Cembra Money Bank’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 put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 3.78%. This means that, we can presume Cembra Money Bank will grow its earnings by 3.78% every year for the next few years.

Next Steps:

For Cembra Money Bank, I’ve compiled three pertinent factors you should further examine:

1. 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.

2. Valuation: What is CMBN 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 CMBN is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CMBN? 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.