The most recent earnings announcement Agritrade Resources Limited’s (HKG:1131) released in March 2018 signalled that the company benefited from a large tailwind, eventuating to a high double-digit earnings growth of 81.45%. Below, I’ve laid out key growth figures on how market analysts view Agritrade Resources’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.

See our latest analysis for Agritrade Resources

Analysts’ outlook for this coming year seems optimistic, with earnings growing by a robust 20.03%. This growth seems to continue into the following year with rates arriving at double digit 32.22% compared to today’s earnings, and finally hitting HK$748.63m by 2021.

Although it is useful to understand the growth year by year relative to today’s figure, it may be more beneficial evaluating the rate at which the company is rising or falling on average every year. The pro of this method is that we can get a bigger picture of the direction of Agritrade Resources’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve appended 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 18.28%. This means, we can assume Agritrade Resources will grow its earnings by 18.28% every year for the next few years.

Next Steps:

For Agritrade Resources, I’ve compiled three fundamental factors you should look at:

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 1131 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 1131 is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1131? 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.