What Should Investors Know About Pacific Textiles Holdings Limited’s (HKG:1382) Earnings Trend?
Pacific Textiles Holdings Limited’s (HKG:1382) released its most recent earnings update in March 2018, which signalled that the company experienced a substantial headwind with earnings declining by -23.73%. Below is a brief commentary on my key takeaways on how market analysts view Pacific Textiles Holdings’s earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for Pacific Textiles Holdings
Analysts’ outlook for next year seems positive, with earnings expanding by a robust 19.39%. This growth seems to continue into the following year with rates arriving at double digit 28.78% compared to today’s earnings, and finally hitting HK$1.01b by 2021.
Although it is useful to be aware of the rate of growth each year relative to today’s figure, it may be more valuable gauging the rate at which the earnings are moving every year, on average. The benefit of this approach is that we can get a better picture of the direction of Pacific Textiles Holdings’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 8.80%. This means that, we can anticipate Pacific Textiles Holdings will grow its earnings by 8.80% every year for the next few years.
Next Steps:
For Pacific Textiles Holdings, I’ve compiled three essential aspects you should further examine:
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 1382 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 1382 is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1382? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
