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OneVue Holdings Limited (ASX:OVH): Poised For Long Term Success?

Jodi Pearce

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After OneVue Holdings Limited’s (ASX:OVH) earnings announcement in June 2018, analyst consensus outlook appear vastly optimistic, as a 55% rise in profits is expected in the upcoming year, though this is noticeably lower than the past 5-year average earnings growth of 68%. Currently with trailing-twelve-month earnings of AU$7.1m, we can expect this to reach AU$11m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for OneVue Holdings in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

Check out our latest analysis for OneVue Holdings

Exciting times ahead?

Longer term expectations from the 4 analysts covering OVH’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for OVH, 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.

ASX:OVH Past and Future Earnings, February 25th 2019
ASX:OVH Past and Future Earnings, February 25th 2019

This results in an annual growth rate of 9.5% based on the most recent earnings level of AU$7.1m to the final forecast of AU$10m by 2022. This leads to an EPS of A$0.039 in the final year of projections relative to the current EPS of A$0.027. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 14% to 14% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For OneVue Holdings, I’ve compiled three important 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. Future Earnings: How does OneVue Holdings’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of OneVue 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.