What Should You Know About Techtronic Industries Company Limited's (HKG:669) Earnings Outlook?
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In December 2018, Techtronic Industries Company Limited (HKG:669) announced its most recent earnings update, which revealed that the company experienced a strong tailwind, eventuating to a double-digit earnings growth of 17%. Investors may find it useful to understand how market analysts perceive Techtronic Industries's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. 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.
See our latest analysis for Techtronic Industries
Analysts' expectations for the upcoming year seems optimistic, with earnings climbing by a robust 17%. This growth seems to continue into the following year with rates reaching double digit 38% compared to today’s earnings, and finally hitting US$922m by 2022.
Although it is helpful to be aware of the growth rate year by year relative to today’s level, it may be more insightful gauging the rate at which the earnings are growing every year, on average. The benefit of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Techtronic Industries's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put 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 17%. This means, we can assume Techtronic Industries will grow its earnings by 17% every year for the next couple of years.
Next Steps:
For Techtronic Industries, I've put together three fundamental 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 669 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 669 is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 669? 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.
