What Should Investors Know About The GPT Group’s (ASX:GPT) Future?
The GPT Group’s (ASX:GPT) unpleasant earnings per share drop is expected to be a big double-digit -52.60% over the next three years. Presently, with an EPS of A$0.732, we can expect an upcoming EPS of A$0.347. I am going to look at the latest data on GPT to assess whether this adverse expected growth is reasonable. See our latest analysis for GPT
Adverse times ahead
The bad news for investors of GPT is that a drop in earnings is on the cards. Analysts are predicting the earnings to slide down to A$0.347 in the three year’s time from previous levels of around A$0.732. This would be a decline of -52.60%, so it will be an interesting ride. In the same period revenue is expected to increase from A$747M to A$810M and net income is predicted to decline from A$1,317M to A$624M in the next couple of years. In addition to this, at the current levels of revenue and profit, margins are certainly underwhelming.
Is the contraction built on solid basis?
The past can be a helpful indicator for future performance for a stock. We can determine whether this level of expected growth is relatively reasonable or whether the negative outlook is too harsh. GPT is expected to face a substantial shift from a previous double-digit growth of 20.18%, over the last five years, to a forecast double-digit decline by analysts. This is highly bearish and may be a sign of an investment period for GPT, incurring higher expense growth than revenue.
Next Steps:
For GPT, I’ve compiled three fundamental aspects 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 GPT 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 GPT is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of GPT? 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.
