U.S. Markets open in 8 hrs

How Do Analysts See Essex Bio-Technology Limited (HKG:1061) Performing In The Next Couple Of Years?

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

In December 2018, Essex Bio-Technology Limited (HKG:1061) released its latest earnings announcement, which showed that the company gained from a strong tailwind, leading to a double-digit earnings growth of 38%. Below, I've laid out key numbers on how market analysts perceive Essex Bio-Technology's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Essex Bio-Technology

Analysts' expectations for the upcoming year seems buoyant, with earnings climbing by a robust 25%. This growth seems to continue into the following year with rates reaching double digit 52% compared to today’s earnings, and finally hitting HK$416m by 2022.

SEHK:1061 Past and Future Earnings, June 16th 2019

Although it is useful to understand the growth rate each year relative to today’s level, it may be more valuable to estimate the rate at which the business is rising or falling on average every year. The advantage of this technique is that we can get a bigger picture of the direction of Essex Bio-Technology's earnings trajectory over the long run, irrespective of near term fluctuations, 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 19%. This means that, we can assume Essex Bio-Technology will grow its earnings by 19% every year for the next couple of years.

Next Steps:

For Essex Bio-Technology, there are three key aspects you should look at:

  1. 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.
  2. Valuation: What is 1061 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 1061 is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1061? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.