U.S. Markets closed

Viva Leisure Limited (ASX:VVA): What Does The Future Look Like?

Simply Wall St

Based on Viva Leisure Limited's (ASX:VVA) earnings update on 30 June 2019, the consensus outlook from analysts appear somewhat bearish, as a 10% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 53%. By 2020, we can expect Viva Leisure’s bottom line to reach AU$3.1m, a jump from the current trailing-twelve-month of AU$2.9m. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

View our latest analysis for Viva Leisure

How is Viva Leisure going to perform in the near future?

The view from 1 analysts over the next three years is one of 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 VVA'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.

ASX:VVA Past and Future Earnings, September 5th 2019

From the current net income level of AU$2.9m and the final forecast of AU$5.9m by 2022, the annual rate of growth for VVA’s earnings is 26%. This leads to an EPS of A$0.11 in the final year of projections relative to the current EPS of A$0.054. Margins are currently sitting at 9.2%, approximately the same as previous years. With analysts forecasting revenue growth of 0.96327 and VVA's net income growth expected to roughly track that, this company may add value for shareholders over time.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Viva Leisure, there are three essential 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 Viva Leisure 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 Viva Leisure is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Viva Leisure? 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.