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Will Keystone Law Group plc's (LON:KEYS) Earnings Grow In The Next 12 Months?

Simply Wall St

After Keystone Law Group plc's (LON:KEYS) earnings announcement in January 2019, analyst consensus outlook appear cautiously subdued, as a 9.0% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 48%. Currently with trailing-twelve-month earnings of UK£3.8m, we can expect this to reach UK£4.1m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

View our latest analysis for Keystone Law Group

How will Keystone Law Group perform in the near future?

The view from 3 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of KEYS's earnings growth over these next few years.

AIM:KEYS Past and Future Earnings, August 24th 2019

From the current net income level of UK£3.8m and the final forecast of UK£5.4m by 2022, the annual rate of growth for KEYS’s earnings is 12%. This leads to an EPS of £0.17 in the final year of projections relative to the current EPS of £0.12. Margins are currently sitting at 8.9%, approximately the same as previous years. With analysts forecasting revenue growth of 0.45773 and KEYS's net income growth expected to roughly track that, this company may add value for shareholders over time.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Keystone Law Group, I've put together three pertinent factors you should look at:

  1. Valuation: What is Keystone Law Group 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 Keystone Law Group is currently mispriced by the market.
  2. Future Earnings: How does Keystone Law Group's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Keystone Law Group? 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.