As Autosports Group Limited (ASX:ASG) released its earnings announcement on 30 June 2019, it seems that analyst forecasts are fairly optimistic, as a 39% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 12%. With trailing-twelve-month net income at current levels of AU$16m, we should see this rise to AU$22m in 2020. Below is a brief commentary on the longer term outlook the market has for Autosports Group. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
What can we expect from Autosports Group in the longer term?
Over the next three years, it seems the consensus view of the 3 analysts covering ASG is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of ASG'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 23% based on the most recent earnings level of AU$16m to the final forecast of AU$31m by 2022. EPS reaches A$0.16 in the final year of forecast compared to the current A$0.078 EPS today. Margins are currently sitting at 0.9%, which is expected to expand to 1.6% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Autosports Group, I've compiled three pertinent factors you should further research:
- 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 Autosports Group 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 Autosports Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Autosports Group? 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.