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In March 2019, Oracle Financial Services Software Limited (NSE:OFSS) released its earnings update. Generally, it seems that analyst forecasts are fairly optimistic, as a 11% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 0.6%. By 2020, we can expect Oracle Financial Services Software’s bottom line to reach ₹15b, a jump from the current trailing-twelve-month of ₹14b. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Oracle Financial Services Software in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How will Oracle Financial Services Software perform in the near future?
Over the next three years, it seems the consensus view of the 3 analysts covering OFSS is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of OFSS's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 8.6% based on the most recent earnings level of ₹14b to the final forecast of ₹18b by 2022. EPS reaches ₹205.22 in the final year of forecast compared to the current ₹161.94 EPS today. With a current profit margin of 28%, this movement will result in a margin of 30% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Oracle Financial Services Software, 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.
- Valuation: What is Oracle Financial Services Software 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 Oracle Financial Services Software is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Oracle Financial Services Software? 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 firstname.lastname@example.org. 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.