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Infomedia Ltd. (ASX:IFM): Immense Growth Potential?

Simply Wall St

Looking at Infomedia Ltd.'s (ASX:IFM) earnings update in December 2018, analysts seem fairly confident, with profits predicted to increase by 21% next year against the past 5-year average growth rate of 0.7%. By 2020, we can expect Infomedia’s bottom line to reach AU$16m, a jump from the current trailing-twelve-month of AU$13m. Below is a brief commentary around Infomedia'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.

See our latest analysis for Infomedia

How will Infomedia perform in the near future?

The view from 4 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for IFM, 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.

ASX:IFM Past and Future Earnings, August 19th 2019

From the current net income level of AU$13m and the final forecast of AU$23m by 2022, the annual rate of growth for IFM’s earnings is 19%. EPS reaches A$0.073 in the final year of forecast compared to the current A$0.042 EPS today. In 2022, IFM's profit margin will have expanded from 18% to 22%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Infomedia, I've compiled three fundamental aspects you should further examine:

  1. Valuation: What is Infomedia 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 Infomedia is currently mispriced by the market.
  2. Future Earnings: How does Infomedia's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Infomedia? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.