Zalaris (OB:ZAL) has become profitable over the last five years, with annual earnings growth averaging 26.3%. Over the past year, earnings growth accelerated to 40.2% and net profit margins increased to 4.5%, up from 3.8% previously. This highlights the company's focus on high-quality earnings.
See our full analysis for Zalaris.
Next, let's see how these results compare to the community narratives and whether the latest surge in profitability is changing the story for Zalaris.
Curious how numbers become stories that shape markets? Explore Community Narratives
Quality Profits Outpace Peers' Margins
* Net profit margin reached 4.5%, moving further above the previous year's 3.8% and demonstrating a notable step up in quality of earnings compared to peers in professional services.
* What stands out against the prevailing market view is that the margin expansion helps set Zalaris apart, even while peer companies in the sector commonly report lower or flat profitability trends.
DCF Fair Value Lags Share Price by Wide Margin
* Zalaris trades at NOK92.80 per share, nearly three times the DCF fair value of NOK32.06, and at a price-to-earnings ratio of 31x, which is well above both the industry average (21x) and the peer group (13x).
* Critics highlight that the wide premium over DCF fair value makes the bullish case harder to justify, especially since the valuation gap has widened alongside the profit gains.
Financial Position Remains a Key Risk