Fidessa group plc (LON:FDSA): Immense Growth Potential?
Looking at Fidessa group plc’s (LSE:FDSA) earnings update in December 2017, analysts seem cautiously optimistic, as a 12.57% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 3.07%. Presently, with earnings at UK£35.68M, we should see this growing to UK£40.17M by 2019. Below is a brief commentary on the longer term outlook the market has for Fidessa group. For those keen to understand more about other aspects of the company, you can research its fundamentals here. See our latest analysis for Fidessa group
How is Fidessa group going to perform in the near future?
The 6 analysts covering FDSA view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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 FDSA’s earnings growth over these next few years.
By 2021, FDSA’s earnings should reach UK£46.33M, from current levels of UK£35.68M, resulting in an annual growth rate of 7.67%. EPS reaches £1.17 in the final year of forecast compared to the current £0.93 EPS today. The main reason for growth is a result of cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 10.08%, this movement will result in a margin of 12.25% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Fidessa group, I’ve compiled three pertinent 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 Fidessa group 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 Fidessa group is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Fidessa group? 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 pass 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.
