What Are Analysts Saying About Data#3 Limited’s (ASX:DTL) Future?
Since Data#3 Limited (ASX:DTL) released its earnings in June 2018, it seems that analyst forecasts are fairly optimistic, as a 13% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 12%. Presently, with latest-twelve-month earnings at AU$14m, we should see this growing to AU$16m by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Data#3 in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Check out our latest analysis for Data#3
How will Data#3 perform in the near future?
The view from 2 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of DTL’s earnings growth over these next few years.
This results in an annual growth rate of 7.7% based on the most recent earnings level of AU$14m to the final forecast of AU$18m by 2021. This leads to an EPS of A$0.12 in the final year of projections relative to the current EPS of A$0.091. Margins are currently sitting at 1.2%, which is expected to expand to 1.3% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Data#3, I’ve compiled three important aspects you should further research:
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.
Valuation: What is Data#3 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 Data#3 is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Data#3? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
