Ten Entertainment Group Plc (LSE:TEG) is expected to deliver an adverse -82.07% in earnings decline per share over the next three years. With the recent EPS being £1.204, expected contraction will drag down the upcoming EPS to £0.216. Today I will look at the latest data in order to investigate whether this negative future growth rate is plausible. View our latest analysis for Ten Entertainment Group
Adverse times ahead
There are dark clouds over Ten Entertainment Group’s potential over the next couple of years. This is based on 3 analysts who estimate earnings dropping to £0.216 from previous levels of around £1.204. This would be a drop of -82.07%, so it will be an interesting ride for any existing shareholders over the next couple of years. During the same time revenue is expected to grow from £68M to £88M and profits (net income) are predicted to be slashed from £2M to £0M in the next couple of years. Though, future margins are predicted to be a respectable 16.83%.
Is this similar growth to the past?
The past can be a helpful indicator for future performance for a stock. We can determine whether this level of expected growth is relatively justified or whether the negative sentiment is too pessimistic. TEG is expected to face a massive swing from a previous double-digit growth of 172.67%, over the last five years, to a forecast double-digit decline by analysts. This is highly unencouraging and may be a sign of an investment period for TEG, incurring higher expense growth than revenue.
For TEG, I’ve put together three pertinent factors you should further examine:
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 TEG 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 TEG is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of TEG? 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.