What Should We Expect From Helloworld Travel Limited’s (ASX:HLO) Earnings In The Next 12 Months?
Since Helloworld Travel Limited (ASX:HLO) released its earnings in June 2018, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 30% in the upcoming year against the past 5-year average growth rate of 26%. Presently, with latest-twelve-month earnings at AU$32m, we should see this growing to AU$42m by 2020. Below is a brief commentary around Helloworld Travel’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
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Exciting times ahead?
The view from 4 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for HLO, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of AU$32m and the final forecast of AU$52m by 2022, the annual rate of growth for HLO’s earnings is 15%. EPS reaches A$0.42 in the final year of forecast compared to the current A$0.27 EPS today. Margins are currently sitting at 9.8%, which is expected to expand to 13% by 2022.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Helloworld Travel, 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 Helloworld Travel 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 Helloworld Travel is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Helloworld Travel? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
