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nvestors were left underwhelmed by Gateway Real Estate AG's (ETR:GTY) earnings, despite impressive profit numbers. However, a closer look reveals some underlying concerns. See our analysis for more on Gateway Real Estate's earnings history.

    Unusual items played a significant role in boosting Gateway Real Estate's profit by €40m over the last year. While higher profits are generally a positive sign, we prefer sustainable growth. Our data indicates that unusual item boosts often don't repeat the following year. In fact, accounting terminology implies as much. We found that Gateway Real Estate's unusual items were substantial relative to its profit in the year to June 2024, making its statutory profit stronger than it would be otherwise.

    We recommend investors check balance sheet strength before making any conclusions. Our analysis of Gateway Real Estate's balance sheet is available here.

    Gateway Real Estate's earnings per share have grown at an impressive rate over the last three years. However, we believe that the significant positive unusual item makes its statutory profits a poor guide to underlying profitability. This might give investors an overly positive impression of the company. We've only scratched the surface in our analysis and recommend considering other factors such as margins, forecast growth, and return on investment.

    It's essential to be aware of the risks involved when analyzing Gateway Real Estate. We've identified 3 warning signs for the company that you should be mindful of. This note has only looked at one aspect of Gateway Real Estate's profit, but there is more to discover if you're willing to dig deeper.