Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
As WNS (Holdings) Limited (NYSE:WNS) announced its earnings release on 31 March 2019, analyst forecasts seem fairly subdued, as a 2.0% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 14%. Presently, with latest-twelve-month earnings at US$105m, we should see this growing to US$108m by 2020. Below is a brief commentary on the longer term outlook the market has for WNS (Holdings). For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect WNS (Holdings) to keep growing?
The longer term view from the 12 analysts covering WNS is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of WNS's earnings growth over these next few years.
This results in an annual growth rate of 5.6% based on the most recent earnings level of US$105m to the final forecast of US$120m by 2022. EPS reaches $2.34 in the final year of forecast compared to the current $2.1 EPS today. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 13% to 11% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For WNS (Holdings), I've put together three key 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 WNS (Holdings) 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 WNS (Holdings) is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of WNS (Holdings)? 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 email@example.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.