What Should You Know About Virtus Health Limited’s (ASX:VRT) Growth?
In June 2018, Virtus Health Limited (ASX:VRT) released its earnings update. Generally, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 5.0% in the upcoming year against the higher past 5-year average growth rate of 9.4%. With trailing-twelve-month net income at current levels of AU$31m, we should see this rise to AU$32m in 2019. Below is a brief commentary around Virtus Health’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
View our latest analysis for Virtus Health
Can we expect Virtus Health to keep growing?
Longer term expectations from the 5 analysts covering VRT’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for VRT, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
By 2021, VRT’s earnings should reach AU$37m, from current levels of AU$31m, resulting in an annual growth rate of 5.0%. This leads to an EPS of A$0.45 in the final year of projections relative to the current EPS of A$0.38. In 2021, VRT’s profit margin will have expanded from 12% to 12%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Virtus Health, I’ve compiled 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 Virtus Health 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 Virtus Health is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Virtus Health? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
