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nib holdings limited (ASX:NHF): What Does The Future Look Like?

Simply Wall St

After nib holdings limited's (ASX:NHF) earnings announcement on 30 June 2019, analyst consensus outlook seem pessimistic, with earnings expected to decline by 3.2% in the upcoming year compared with the past 5-year average growth rate of 16%. Currently with a trailing-twelve-month profit of AU$149m, the consensus growth rate suggests that earnings will drop to AU$145m by 2020. Below is a brief commentary on the longer term outlook the market has for nib holdings. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for nib holdings

Can we expect nib holdings to keep growing?

Over the next three years, it seems the consensus view of the 7 analysts covering NHF is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of NHF's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

ASX:NHF Past and Future Earnings, August 20th 2019

This results in an annual growth rate of 2.9% based on the most recent earnings level of AU$149m to the final forecast of AU$161m by 2022. EPS reaches A$0.34 in the final year of forecast compared to the current A$0.33 EPS today. Margins are currently sitting at 6.1%, approximately the same as previous years. With analysts forecasting revenue growth of 0.08518 and NHF's net income growth expected to roughly track that, this company may add value for shareholders over time.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For nib holdings, there are three relevant factors you should look at:

  1. 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.
  2. Valuation: What is nib holdings 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 nib holdings is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of nib holdings? 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.