Yahoo Finance How Do Analysts See Skellerup Holdings Limited (NZSE:SKL) Performing In The Next 12 Months?
In June 2018, Skellerup Holdings Limited (NZSE:SKL) released its earnings update. Generally, analysts seem cautiously optimistic, with profits predicted to increase by 9.2% next year against the past 5-year average growth rate of -4.2%. Currently with trailing-twelve-month earnings of NZ$27m, we can expect this to reach NZ$30m by 2019. Below is a brief commentary around Skellerup Holdings’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
View our latest analysis for Skellerup Holdings
What can we expect from Skellerup Holdings in the longer term?
The view from 3 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of NZ$27m and the final forecast of NZ$34m by 2021, the annual rate of growth for SKL’s earnings is 6.9%. This leads to an EPS of NZ$0.17 in the final year of projections relative to the current EPS of NZ$0.14. The primary reason for earnings growth is due to reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. With a current profit margin of 11%, this movement will result in a margin of 12% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Skellerup Holdings, I’ve put together three fundamental factors you should look at:
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 Skellerup Holdings 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 Skellerup Holdings is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Skellerup Holdings? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
