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SSP Group plc (LON:SSPG): What Does The Future Look Like?

Simply Wall St

SSP Group plc’s (LON:SSPG) announced its latest earnings update in September 2018, which revealed that the business experienced a robust tailwind, eventuating to a double-digit earnings growth of 26%. Below, I’ve laid out key numbers on how market analysts perceive SSP Group’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for SSP Group

Market analysts’ prospects for next year seems rather subdued, with earnings growing by a single digit 9.4%. The growth outlook in the following year seems much more optimistic with rates arriving at double digit 28% compared to today’s earnings, and finally hitting UK£175m by 2022.

LSE:SSPG Past and Future Earnings, March 4th 2019

While it’s helpful to be aware of the growth rate year by year relative to today’s value, it may be more insightful gauging the rate at which the company is growing every year, on average. The advantage of this technique is that we can get a better picture of the direction of SSP Group’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 13%. This means, we can anticipate SSP Group will grow its earnings by 13% every year for the next couple of years.

Next Steps:

For SSP Group, I’ve compiled three important 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 SSPG 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 SSPG is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SSPG? 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.