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What Should Investors Know About Cyient Limited's (NSE:CYIENT) Growth?

Simply Wall St

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In March 2019, Cyient Limited (NSE:CYIENT) announced its earnings update. Overall, analysts seem cautiously optimistic, with earnings expected to grow by 10% in the upcoming year relative to the past 5-year average growth rate of 7.6%. By 2020, we can expect Cyient’s bottom line to reach ₹5.3b, a jump from the current trailing-twelve-month of ₹4.8b. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Cyient in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.

View our latest analysis for Cyient

How will Cyient perform in the near future?

The longer term expectations from the 14 analysts of CYIENT is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for CYIENT, 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.

NSEI:CYIENT Past and Future Earnings, July 18th 2019

This results in an annual growth rate of 8.7% based on the most recent earnings level of ₹4.8b to the final forecast of ₹6.2b by 2022. EPS reaches ₹57.38 in the final year of forecast compared to the current ₹42.42 EPS today. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 10% to 10% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Cyient, I've compiled three relevant factors you should further research:

  1. 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.
  2. Valuation: What is Cyient 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 Cyient is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Cyient? 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.