Based on EQT Holdings Limited's (ASX:EQT) earnings update on 30 June 2019, analysts seem cautiously optimistic, with earnings expected to grow by 15% in the upcoming year against the past 5-year average growth rate of 12%. Presently, with latest-twelve-month earnings at AU$22m, we should see this growing to AU$25m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Exciting times ahead?
Over the next three years, it seems the consensus view of the 2 analysts covering EQT 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 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, EQT's earnings should reach AU$32m, from current levels of AU$22m, resulting in an annual growth rate of 12%. EPS reaches A$1.57 in the final year of forecast compared to the current A$1.09 EPS today. In 2022, EQT's profit margin will have expanded from 24% to 29%.
Future outlook is only one aspect when you're building an investment case for a stock. For EQT Holdings, I've put together three key 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 EQT Holdings 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 EQT Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of EQT Holdings? 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.