Yahoo Finance Hollysys Automation Technologies Ltd (NASDAQ:HOLI): What We Can Expect From This Growth Stock
On 30 June 2018, Hollysys Automation Technologies Ltd (NASDAQ:HOLI) announced its earnings update. Overall, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 21% in the upcoming year against the past 5-year average growth rate of 8.5%. With trailing-twelve-month net income at current levels of US$107m, we should see this rise to US$130m in 2019. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Check out our latest analysis for Hollysys Automation Technologies
How is Hollysys Automation Technologies going to perform in the near future?
The longer term view from the 7 analysts covering HOLI is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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.
This results in an annual growth rate of 16% based on the most recent earnings level of US$107m to the final forecast of US$190m by 2021. EPS reaches $2.48 in the final year of forecast compared to the current $1.77 EPS today. Growth in earnings appears to be a result of cost cutting activities, as revenues is expected to grow much slower than earnings. Margins is currently sitting at 20%, which is expected to expand to 23% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Hollysys Automation Technologies, I’ve compiled three fundamental factors you should further research:
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 Hollysys Automation Technologies 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 Hollysys Automation Technologies is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Hollysys Automation Technologies? 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.
