In This Article:
Agro Tech Foods Limited’s (NSE:ATFL) most recent earnings announcement in March 2018 suggested that the business gained from a robust tailwind, leading to a double-digit earnings growth of 14%. Today I want to provide a brief commentary on how market analysts perceive Agro Tech Foods’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Agro Tech Foods
Analysts’ outlook for next year seems optimistic, with earnings increasing by a robust 22%. This growth seems to continue into the following year with rates arriving at double digit 59% compared to today’s earnings, and finally hitting ₹517m by 2021.
Although it is useful to be aware of the growth rate year by year relative to today’s figure, it may be more insightful gauging the rate at which the business is moving every year, on average. The pro of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Agro Tech Foods’s earnings trajectory over time, which may be more relevant for long term investors. To compute 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 17%. This means that, we can presume Agro Tech Foods will grow its earnings by 17% every year for the next few years.
Next Steps:
For Agro Tech Foods, there are three relevant aspects you should further examine:
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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.
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Valuation: What is ATFL 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 ATFL is currently mispriced by the market.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ATFL? 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.