What Should You Know About The Future Of Gateway Lifestyle Group’s (ASX:GTY) Business?
In June 2017, Gateway Lifestyle Group (ASX:GTY) announced its latest earnings update, which showed that the company gained from a large tailwind, eventuating to a high double-digit earnings growth of 53.39%. Below, I’ve laid out key numbers on how market analysts view Gateway Lifestyle Group’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View our latest analysis for Gateway Lifestyle Group
Market analysts’ prospects for next year seems pessimistic, with earnings declining by a double-digit -20.98%. Beyond this, earnings are predicted to continue to be below today’s level, with a decline of -17.05% in 2020, eventually reaching AU$49.53M in 2021.
Even though it is helpful to be aware of the growth rate year by year relative to today’s value, it may be more beneficial to gauge the rate at which the company is rising or falling every year, on average. The advantage of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Gateway Lifestyle Group’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is -2.41%. This means, we can assume Gateway Lifestyle Group will chip away at a rate of -2.41% every year for the next few years.
Next Steps:
For Gateway Lifestyle Group, I’ve put together three pertinent factors you should further research:
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 GTY 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 GTY is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of GTY? 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.
