Warpaint London PLC’s (AIM:W7L) most recent earnings update in December 2017 indicated that the company gained from a strong 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 looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for Warpaint London
Analysts’ outlook for next year seems optimistic, with earnings increasing by a robust 44.69%. This growth seems to continue into the following year with rates arriving at double digit 87.12% compared to today’s earnings, and finally hitting UK£11.87M by 2021.
Although it is useful to be aware of the rate of growth each year relative to today’s level, it may be more insightful to analyze the rate at which the company is growing every year, on average. The advantage of this technique is that it ignores near term flucuations and accounts for the overarching direction of Warpaint London’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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 24.25%. This means, we can expect Warpaint London will grow its earnings by 24.25% every year for the next few years.
For Warpaint London, I’ve compiled three pertinent aspects you should further examine:
- 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.