Yahoo Finance What Should You Know About Delegat Group Limited’s (NZSE:DGL) Long Term Outlook?
In June 2018, Delegat Group Limited (NZSE:DGL) announced its most recent earnings update, which suggested that the company gained from a robust tailwind, leading to a double-digit earnings growth of 15.2%. Below is a brief commentary on my key takeaways on how market analysts predict Delegat Group’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. 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 Delegat Group
Market analysts’ prospects for this coming year seems rather muted, with earnings rising by a single digit 7.0%. The growth outlook in the following year seems much more optimistic with rates reaching double digit 22.0% compared to today’s earnings, and finally hitting NZ$64.8m by 2021.
Although it’s helpful to understand the growth rate each year relative to today’s value, it may be more valuable to gauge the rate at which the company is growing every year, on average. The benefit of this method is that we can get a better picture of the direction of Delegat Group’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 11.1%. This means that, we can presume Delegat Group will grow its earnings by 11.1% every year for the next few years.
Next Steps:
For Delegat Group, there are three essential factors you should further examine:
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 DGL 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 DGL is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of DGL? 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.
