The latest earnings release Warpaint London PLC’s (LON:W7L) announced in December 2017 indicated that the business experienced a large tailwind, leading to a high double-digit earnings growth of 74.24%. Below, I’ve laid out key growth figures on how market analysts perceive Warpaint London’s earnings growth trajectory over the next few 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. Check out our latest analysis for Warpaint London
Analysts’ expectations for this coming year seems buoyant, with earnings increasing by a significant 53.48%. This high growth in earnings is expected to continue, bringing the bottom line up to UK£12.00m by 2021.
Although it’s useful to understand the growth year by year relative to today’s value, it may be more valuable to determine the rate at which the company is moving every year, on average. The benefit of this technique is that we can get a bigger picture of the direction of Warpaint London’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 23.79%. This means that, we can presume Warpaint London will grow its earnings by 23.79% every year for the next few years.
For Warpaint London, I’ve put together three fundamental aspects you should look at:
- 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.
- Future Earnings: How does W7L’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of W7L? 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 pass 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.