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City Chic Collective Limited (ASX:CCX): What Are The Future Prospects?

Simply Wall St

As City Chic Collective Limited (ASX:CCX) announced its earnings release on 30 June 2019, analysts seem cautiously optimistic, as a 28% increase in profits is expected in the upcoming year, though this is relatively lower than the past 5-year average earnings growth of 35%. With trailing-twelve-month net income at current levels of AU$14m, we should see this rise to AU$18m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for City Chic Collective

How is City Chic Collective going to perform in the near future?

The view from 4 analysts over the next three years 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. To get an idea of the overall earnings growth trend for CCX, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

ASX:CCX Past and Future Earnings, August 28th 2019

From the current net income level of AU$14m and the final forecast of AU$24m by 2022, the annual rate of growth for CCX’s earnings is 17%. EPS reaches A$0.12 in the final year of forecast compared to the current A$0.074 EPS today. In 2022, CCX's profit margin will have expanded from 9.6% to 11%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For City Chic Collective, I've put together three key factors you should further examine:

  1. Valuation: What is City Chic Collective 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 City Chic Collective is currently mispriced by the market.
  2. Future Earnings: How does City Chic Collective's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of City Chic Collective? 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.