The latest earnings release Crystal International Group Limited's (HKG:2232) announced in April 2019 confirmed that the business benefited from a small tailwind, eventuating to a single-digit earnings growth of 0.5%. Below, I've laid out key numbers on how market analysts perceive Crystal International Group's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Analysts' outlook for next year seems rather muted, with earnings climbing by a single digit 3.0%. The growth outlook in the following year seems much more positive with rates generating double digit 20% compared to today’s earnings, and finally hitting US$190m by 2022.
While it is useful to understand the growth each year relative to today’s figure, it may be more valuable to evaluate the rate at which the business is rising or falling on average every year. The advantage of this method is that it ignores near term flucuations and accounts for the overarching direction of Crystal International Group's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 8.8%. This means, we can anticipate Crystal International Group will grow its earnings by 8.8% every year for the next couple of years.
For Crystal International Group, there are three important 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 2232 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 2232 is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 2232? 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.