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The latest earnings announcement LC Corp S.A. (WSE:LCC) released in December 2018 indicated that the company gained from a strong tailwind, leading to a high double-digit earnings growth of 100%. Below, I've laid out key numbers on how market analysts view LC's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Analysts' expectations for the upcoming year seems positive, with earnings increasing by a robust 24%. However, the following year seems to show a contrast, with earnings falling by -8.8%. This volatility is expected to reduce in the final year with earnings remaining stable at zł147m.
Even though it’s informative knowing the rate of growth each year relative to today’s value, it may be more beneficial determining the rate at which the earnings are moving on average every year. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of LC's earnings trajectory over time, fluctuate up and down. To calculate this rate, I've appended 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 -5.6%. This means that, we can assume LC will chip away at a rate of -5.6% every year for the next couple of years.
For LC, I've compiled three fundamental factors you should further examine:
- 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 LCC 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 LCC is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of LCC? 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 email@example.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.