The latest earnings announcement Pacific Textiles Holdings Limited (HKG:1382) released in July 2019 signalled that the company gained from a strong tailwind, leading to a double-digit earnings growth of 16%. Below, I've presented key growth figures on how market analysts view Pacific Textiles Holdings's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts' expectations for next year seems rather subdued, with earnings increasing by a single digit 4.3%. The following year doesn't look much more exciting, though earnings does reach HK$982m in 2022.
Even though it is helpful to be aware of the growth rate each year relative to today’s level, it may be more valuable to estimate the rate at which the company is growing on average every year. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Pacific Textiles Holdings's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 4.4%. This means that, we can presume Pacific Textiles Holdings will grow its earnings by 4.4% every year for the next few years.
For Pacific Textiles Holdings, 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 1382 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 1382 is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1382? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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If you spot an error that warrants correction, please contact the editor at email@example.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.