As Delegat Group Limited (NZSE:DGL) released its earnings announcement on 30 June 2019, analysts seem cautiously optimistic, with profits predicted to increase by 9.7% next year compared with the past 5-year average growth rate of 5.5%. By 2020, we can expect Delegat Group’s bottom line to reach NZ$52m, a jump from the current trailing-twelve-month of NZ$47m. Below is a brief commentary around Delegat Group's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How will Delegat Group perform in the near future?
The longer term view from the 3 analysts covering DGL is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, DGL's earnings should reach NZ$69m, from current levels of NZ$47m, resulting in an annual growth rate of 10%. This leads to an EPS of NZ$0.68 in the final year of projections relative to the current EPS of NZ$0.47. With a current profit margin of 17%, this movement will result in a margin of 20% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Delegat Group, I've compiled three essential 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 Delegat 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 Delegat Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Delegat 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.