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Will SCISYS Group PLC's (LON:SSY) Earnings Grow In The Years Ahead?

Simply Wall St

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The latest earnings release SCISYS Group PLC's (LON:SSY) announced in December 2018 revealed that the company endured a major headwind with earnings deteriorating by -54%. Below, I've laid out key numbers on how market analysts perceive SCISYS Group's earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for SCISYS Group

Analysts' outlook for this coming year seems buoyant, with earnings expanding by a significant 93%. Earnings are predicted to shoot up to around UK£3.1m in the following year before plateauing, heading into 2022.

AIM:SSY Past and Future Earnings, June 12th 2019

Although it is informative understanding the growth each year relative to today’s figure, it may be more insightful analyzing the rate at which the business is growing every year, on average. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of SCISYS Group's earnings trajectory over time, be more volatile. 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 23%. This means that, we can expect SCISYS Group will grow its earnings by 23% every year for the next few years.

Next Steps:

For SCISYS Group, there are three relevant aspects 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 SSY 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 SSY is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SSY? 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.