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What Should We Expect From Asset Plus Limited's (NZSE:APL) Earnings Over The Next Few Years?

Simply Wall St

Asset Plus Limited's (NZSE:APL) latest earnings update in May 2019 revealed that the company experienced a strong tailwind, leading to a double-digit earnings growth of 23%. Below, I've laid out key growth figures on how market analysts predict Asset Plus's earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Asset Plus

Analysts' expectations for this coming year seems positive, with earnings rising by a significant 65%. This level of earnings is expected to be maintained in the following year before declining in 2022 to NZ$5.9m.

NZSE:APL Past and Future Earnings, August 18th 2019

Even though it is informative understanding the growth year by year relative to today’s value, it may be more beneficial analyzing the rate at which the earnings are growing every year, on average. The benefit of this method is that we can get a bigger picture of the direction of Asset Plus's earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute this rate, I've appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 8.1%. This means that, we can anticipate Asset Plus will grow its earnings by 8.1% every year for the next few years.

Next Steps:

For Asset Plus, there are three key aspects you should look at:

  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 APL 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 APL is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of APL? 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.