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Silvercorp Metals Inc.'s (TSE:SVM) most recent earnings announcement in May 2019 revealed that the company endured a substantial headwind with earnings deteriorating by -15%. Below, I've laid out key growth figures on how market analysts predict Silvercorp Metals's earnings growth outlook over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Market analysts' consensus outlook for the coming year seems pessimistic, with earnings decreasing by -1.6%. But in the following year, there is a complete contrast in performance, with earnings growth rates arriving at double digit 14% compared to today’s level before declining. to US$37m in 2022.
While it is informative understanding the rate of growth each year relative to today’s value, it may be more insightful evaluating the rate at which the company is rising or falling every year, on average. The advantage of this method is that we can get a better picture of the direction of Silvercorp Metals's earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. 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 1.5%. This means that, we can anticipate Silvercorp Metals will grow its earnings by 1.5% every year for the next couple of years.
For Silvercorp Metals, I've put together three essential aspects you should look at:
- 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 SVM 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 SVM is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SVM? 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 firstname.lastname@example.org. 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.