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How Do Analysts See Evolution Mining Limited (ASX:EVN) Performing In The Years Ahead?

Simply Wall St

The latest earnings update Evolution Mining Limited (ASX:EVN) released in August 2019 confirmed that the company endured a significant headwind with earnings declining by -17%. Below, I've presented key growth figures on how market analysts perceive Evolution Mining's earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for Evolution Mining

Market analysts' prospects for next year seems buoyant, with earnings growing by a significant 80%. This level of earnings is expected to be maintained over the next couple of years, plateauing at AU$416m by 2022.

ASX:EVN Past and Future Earnings, September 2nd 2019

Although it is useful to understand the rate of growth year by year relative to today’s figure, it may be more beneficial estimating the rate at which the business is rising or falling on average every year. The benefit of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Evolution Mining'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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 15%. This means that, we can assume Evolution Mining will grow its earnings by 15% every year for the next few years.

Next Steps:

For Evolution Mining, I've put together three key aspects you should further research:

  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 EVN 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 EVN is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of EVN? 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.