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SSP Group plc (LON:SSPG): Poised For Long Term Success?

Simply Wall St

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Since SSP Group plc (LON:SSPG) released its earnings in September 2018, analyst forecasts seem fairly subdued, with earnings expected to grow by 17% in the upcoming year against the higher past 5-year average growth rate of 53%. Presently, with latest-twelve-month earnings at UK£117m, we should see this growing to UK£138m by 2020. Below is a brief commentary on the longer term outlook the market has for SSP Group. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

Check out our latest analysis for SSP Group

What can we expect from SSP Group in the longer term?

Over the next three years, it seems the consensus view of the 14 analysts covering SSPG 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 SSPG'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.

LSE:SSPG Past and Future Earnings, May 10th 2019

By 2022, SSPG's earnings should reach UK£174m, from current levels of UK£117m, resulting in an annual growth rate of 13%. This leads to an EPS of £0.37 in the final year of projections relative to the current EPS of £0.26. In 2022, SSPG's profit margin will have expanded from 4.6% to 5.7%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For SSP Group, I've put together three pertinent factors you should further examine:

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