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Vaisala Oyj (HEL:VAIAS): Set To Experience A Decrease In Earnings?

Simply Wall St

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Looking at Vaisala Oyj's (HEL:VAIAS) earnings update in March 2019, analyst forecasts seem bearish, with profits predicted to drop by 1.1% next year compared with the past 5-year average growth rate of 15%. Currently with a trailing-twelve-month profit of €30m, the consensus growth rate suggests that earnings will drop to €29m by 2020. Below is a brief commentary on the longer term outlook the market has for Vaisala Oyj. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for Vaisala Oyj

How is Vaisala Oyj going to perform in the near future?

The view from 3 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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.

HLSE:VAIAS Past and Future Earnings, July 18th 2019

By 2022, VAIAS's earnings should reach €38m, from current levels of €30m, resulting in an annual growth rate of 10%. This leads to an EPS of €0.92 in the final year of projections relative to the current EPS of €0.82. Margins are currently sitting at 8.5%, which is expected to expand to 9.0% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Vaisala Oyj, I've put together three relevant aspects you should look at:

  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 Vaisala Oyj 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 Vaisala Oyj is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Vaisala Oyj? 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. Thank you for reading.