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Evolution Mining Limited (ASX:EVN): What We Can Expect From This Growth Stock

Simply Wall St

On 30 June 2019, Evolution Mining Limited (ASX:EVN) announced its earnings update. Overall, analysts seem extremely confident, with earnings expected to grow by a high double-digit of 70% in the upcoming year, compared with the past 5-year average growth rate of 36%. By 2020, we can expect Evolution Mining’s bottom line to reach AU$371m, a jump from the current trailing-twelve-month of AU$218m. Below is a brief commentary around Evolution Mining'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.

See our latest analysis for Evolution Mining

Can we expect Evolution Mining to keep growing?

The longer term expectations from the 11 analysts of EVN is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of EVN's earnings growth over these next few years.

ASX:EVN Past and Future Earnings, August 15th 2019

By 2022, EVN's earnings should reach AU$328m, from current levels of AU$218m, resulting in an annual growth rate of 12%. EPS reaches A$0.17 in the final year of forecast compared to the current A$0.13 EPS today. In 2022, EVN's profit margin will have expanded from 14% to 20%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Evolution Mining, I've put together three pertinent factors you should further research:

  1. 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.
  2. Valuation: What is Evolution Mining 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 Evolution Mining is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Evolution Mining? 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.