What Should Investors Know About Powerlong Real Estate Holdings Limited's (HKG:1238) Earnings Trajectory?
Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!
The latest earnings announcement Powerlong Real Estate Holdings Limited (HKG:1238) released in December 2018 signalled that the company faced a major headwind with earnings deteriorating by -15%. Investors may find it useful to understand how market analysts perceive Powerlong Real Estate Holdings's earnings growth outlook over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for Powerlong Real Estate Holdings
Analysts' outlook for this coming year seems pessimistic, with earnings decreasing by -1.2%. But in the following year, there is a complete contrast in performance, with reaching double digit 29% compared to today’s level and continues to increase to CN¥4.4b in 2022.
While it is helpful to be aware of the growth rate year by year relative to today’s value, it may be more insightful evaluating the rate at which the business is moving every year, on average. The benefit of this technique is that we can get a bigger picture of the direction of Powerlong Real Estate 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 inserted 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 16%. This means that, we can anticipate Powerlong Real Estate Holdings will grow its earnings by 16% every year for the next couple of years.
Next Steps:
For Powerlong Real Estate Holdings, I've compiled three important aspects you should further research:
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 1238 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 1238 is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1238? 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.
