Looking at Skellerup Holdings Limited's (NZSE:SKL) earnings update on 30 June 2019, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 4.9% in the upcoming year compared with the past 5-year average growth rate of -5.0%. With trailing-twelve-month net income at current levels of NZ$29m, we should see this rise to NZ$30m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How will Skellerup Holdings perform in the near future?
The view from 3 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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 SKL's earnings growth over these next few years.
By 2022, SKL's earnings should reach NZ$34m, from current levels of NZ$29m, resulting in an annual growth rate of 5.5%. EPS reaches NZ$0.17 in the final year of forecast compared to the current NZ$0.15 EPS today. With a current profit margin of 12%, this movement will result in a margin of 12% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Skellerup Holdings, there are three essential factors you should further examine:
- 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 Skellerup Holdings 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 Skellerup Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Skellerup Holdings? 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.