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Park City Group, Inc. (NASDAQ:PCYG): Poised For Long Term Success?

Simply Wall St

In March 2019, Park City Group, Inc. (NASDAQ:PCYG) announced its earnings update. Overall, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 28% next year, though this is comparatively lower than the historical 5-year average earnings growth of 61%. With trailing-twelve-month net income at current levels of US$2.8m, we should see this rise to US$3.6m in 2020. Below is a brief commentary on the longer term outlook the market has for Park City Group. For those interested in more of an analysis of the company, you can research its fundamentals here.

See our latest analysis for Park City Group

Exciting times ahead?

The view from 2 analysts over the next three years 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 PCYG, 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.

NasdaqCM:PCYG Past and Future Earnings, July 22nd 2019

From the current net income level of US$2.8m and the final forecast of US$5.5m by 2022, the annual rate of growth for PCYG’s earnings is 24%. EPS reaches $0.38 in the final year of forecast compared to the current $0.14 EPS today. With a current profit margin of 13%, this movement will result in a margin of 17% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Park City Group, I've compiled three fundamental factors you should further research:

  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 Park City Group 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 Park City Group is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Park City Group? 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.