What Should We Expect From Qantm Intellectual Property Limited’s (ASX:QIP) Earnings In The Next Couple Of Years?
The latest earnings announcement Qantm Intellectual Property Limited (ASX:QIP) released in June 2018 showed that the business experienced a robust tailwind, eventuating to a double-digit earnings growth of 32%. Below, I’ve presented key growth figures on how market analysts perceive Qantm Intellectual Property’s earnings growth trajectory over the next few 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.
See our latest analysis for Qantm Intellectual Property
Analysts’ outlook for the coming year seems optimistic, with earnings increasing by a robust 36%. This growth seems to continue into the following year with rates reaching double digit 50% compared to today’s earnings, and finally hitting AU$16m by 2021.
While it is helpful to be aware of the growth rate each year relative to today’s level, it may be more insightful evaluating the rate at which the earnings are rising or falling on average every year. The advantage of this method is that we can get a better picture of the direction of Qantm Intellectual Property’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate 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 16%. This means that, we can assume Qantm Intellectual Property will grow its earnings by 16% every year for the next few years.
Next Steps:
For Qantm Intellectual Property, I’ve compiled three pertinent factors 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 QIP 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 QIP is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of QIP? 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.
