Looking at Public Joint Stock Company ALROSA's (MCX:ALRS) earnings update in March 2019, analyst forecasts seem pessimistic, as a 4.9% fall in profits is expected in the upcoming year compared with the past 5-year average growth rate of 32%. Presently, with latest-twelve-month earnings at RUруб89b, we should see this fall to RUруб85b by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for ALROSA in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Exciting times ahead?
The longer term expectations from the 12 analysts of ALRS is tilted towards the 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 ALRS's earnings growth over these next few years.
This results in an annual growth rate of 6.2% based on the most recent earnings level of RUруб89b to the final forecast of RUруб97b by 2022. This leads to an EPS of RUB12.85 in the final year of projections relative to the current EPS of RUB12.29. However, the expansion of the current 33% margin is not expected to be sustained, as it begins to contract to 30% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For ALROSA, I've compiled three key factors 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 ALROSA 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 ALROSA is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ALROSA? 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.