On 30 June 2019, Shine Corporate Ltd (ASX:SHJ) released its earnings update. Generally, analysts seem cautiously optimistic, with profits predicted to increase by 49% next year relative to the past 5-year average growth rate of -9.0%. Currently with trailing-twelve-month earnings of AU$14m, we can expect this to reach AU$21m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Shine in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Exciting times ahead?
The longer term expectations from the 2 analysts of SHJ is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of SHJ's earnings growth over these next few years.
By 2022, SHJ's earnings should reach AU$24m, from current levels of AU$14m, resulting in an annual growth rate of 17%. EPS reaches A$0.14 in the final year of forecast compared to the current A$0.081 EPS today. In 2022, SHJ's profit margin will have expanded from 7.8% to 12%.
Future outlook is only one aspect when you're building an investment case for a stock. For Shine, there are three important aspects you should further examine:
- 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 Shine 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 Shine is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Shine? 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 firstname.lastname@example.org. 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.