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Integrated Research Limited (ASX:IRI): Immense Growth Potential?

Simply Wall St

Based on Integrated Research Limited's (ASX:IRI) earnings update on 30 June 2019, it seems that analyst expectations are fairly bearish, as a 10% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 15%. With trailing-twelve-month net income at current levels of AU$22m, we should see this rise to AU$24m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.

View our latest analysis for Integrated Research

What can we expect from Integrated Research in the longer term?

Over the next three years, it seems the consensus view of the 2 analysts covering IRI is skewed towards the 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 understand the overall trajectory of IRI's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

ASX:IRI Past and Future Earnings, August 23rd 2019

From the current net income level of AU$22m and the final forecast of AU$31m by 2022, the annual rate of growth for IRI’s earnings is 11%. EPS reaches A$0.18 in the final year of forecast compared to the current A$0.13 EPS today. Margins are currently sitting at 22%, which is expected to expand to 24% by 2022.

Next Steps:

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

  1. Valuation: What is Integrated Research 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 Integrated Research is currently mispriced by the market.
  2. Future Earnings: How does Integrated Research'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 Integrated Research? 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.