Advertisement
New Zealand markets closed
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NZD/USD

    0.5987
    +0.0012 (+0.20%)
     
  • NZD/EUR

    0.5541
    +0.0008 (+0.15%)
     
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD

    2,254.80
    +16.40 (+0.73%)
     
  • NASDAQ

    18,254.69
    -26.15 (-0.14%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,807.37
    +47.29 (+0.12%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     
  • NZD/JPY

    90.4740
    +0.0810 (+0.09%)
     

What Should Investors Know About Metro Performance Glass Limited’s (NZSE:MPG) Future?

The most recent earnings update Metro Performance Glass Limited’s (NZSE:MPG) released in March 2018 confirmed that the company endured a major headwind with earnings declining by -15.9%. Investors may find it useful to understand how market analysts predict Metro Performance Glass’s earnings growth outlook over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

View our latest analysis for Metro Performance Glass

Market analysts’ prospects for this coming year seems optimistic, with earnings increasing by a robust 15.7%. However, earnings is forecasted to fall thereafter, reaching NZ$18.1m in 2021.

NZSE:MPG Future Profit September 18th 18
NZSE:MPG Future Profit September 18th 18

While it’s helpful to understand the growth year by year relative to today’s figure, it may be more valuable determining the rate at which the company is moving on average every year. The pro of this method is that we can get a bigger picture of the direction of Metro Performance Glass’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To calculate this rate, I put 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 -3.7%. This means that, we can assume Metro Performance Glass will chip away at a rate of -3.7% every year for the next couple of years.

Next Steps:

For Metro Performance Glass, I’ve compiled three key factors you should further examine:

ADVERTISEMENT
  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 MPG 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 MPG is currently mispriced by the market.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MPG? 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.