Will Blue Prism Group plc’s (LON:PRSM) Earnings Grow In The Years Ahead?
The most recent earnings announcement Blue Prism Group plc’s (AIM:PRSM) released in October 2017 indicated that losses became smaller relative to the prrior year’s level – great news for investors Below is my commentary, albeit very simple and high-level, on how market analysts view Blue Prism Group’s earnings growth outlook over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. See our latest analysis for Blue Prism Group
Analysts’ expectations for the coming year seems pessimistic, with earnings becoming even more negative, reaching -UK£22.87M in 2019. In the following year, earnings are predicted to hover around the same level before rising to -UK£18.61M in 2021.
Even though it’s useful to understand the growth rate year by year relative to today’s figure, it may be more valuable to analyze the rate at which the business is rising or falling every year, on average. The benefit of this method is that we can get a better picture of the direction of Blue Prism Group’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put 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 -18.77%. This means that, we can expect Blue Prism Group will chip away at a rate of -18.77% every year for the next couple of years.
Next Steps:
For Blue Prism Group, there are three relevant factors you should further examine:
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.
Management:Have insiders been ramping up their shares to take advantage of the market’s sentiment for PRSM’s future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of PRSM? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
