Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!
The most recent earnings update Lifestyle International Holdings Limited's (HKG:1212) released in December 2018 revealed that the company faced a major headwind with earnings deteriorating by -41%. Below, I've presented key growth figures on how market analysts perceive Lifestyle International Holdings's earnings growth trajectory over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Analysts' expectations for next year seems buoyant, with earnings rising by a robust 16%. This growth seems to continue into the following year with rates arriving at double digit 24% compared to today’s earnings, and finally hitting HK$2.1b by 2022.
While it is useful to be aware of the growth rate each year relative to today’s figure, it may be more insightful to estimate the rate at which the business is growing every year, on average. The advantage of this approach is that we can get a better picture of the direction of Lifestyle International Holdings's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've inserted 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 7.6%. This means that, we can assume Lifestyle International Holdings will grow its earnings by 7.6% every year for the next few years.
For Lifestyle International Holdings, I've compiled three relevant aspects you should further research:
- 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 1212 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 1212 is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1212? 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.