The latest earnings announcement MGI Digital Technology Société Anonyme (EPA:ALMDG) released in April 2019 showed that the company experienced a strong tailwind, eventuating to a double-digit earnings growth of 46%. Investors may find it useful to understand how market analysts perceive MGI Digital Technology Société Anonyme’s earnings growth outlook 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 MGI Digital Technology Société Anonyme

Market analysts’ prospects for this coming year seems buoyant, with earnings increasing by a robust 11%. This growth seems to continue into the following year with rates reaching double digit 63% compared to today’s earnings, and finally hitting €22m by 2022.

ENXTPA:ALMDG Past and Future Earnings, August 25th 2019
ENXTPA:ALMDG Past and Future Earnings, August 25th 2019

Even though it’s useful to be aware of the growth each year relative to today’s figure, it may be more insightful analyzing the rate at which the earnings are rising or falling on average every year. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of MGI Digital Technology Société Anonyme’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended 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 20%. This means, we can assume MGI Digital Technology Société Anonyme will grow its earnings by 20% every year for the next few years.

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Next Steps:

For MGI Digital Technology Société Anonyme, I’ve put together three fundamental aspects 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 ALMDG 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 ALMDG is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ALMDG? 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.

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