On 30 June 2019, Helloworld Travel Limited (ASX:HLO) announced its earnings update. Overall, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 13% in the upcoming year compared with the higher past 5-year average growth rate of 62%. With trailing-twelve-month net income at current levels of AU$38m, we should see this rise to AU$43m in 2020. Below is a brief commentary around Helloworld Travel's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

Check out our latest analysis for Helloworld Travel

How is Helloworld Travel going to perform in the near future?

The longer term expectations from the 5 analysts of HLO is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of HLO's earnings growth over these next few years.

From the current net income level of AU$38m and the final forecast of AU$51m by 2022, the annual rate of growth for HLO’s earnings is 9.4%. EPS reaches A$0.41 in the final year of forecast compared to the current A$0.32 EPS today. Margins are currently sitting at 11%, which is expected to expand to 13% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Helloworld Travel, I've compiled three key aspects you should further research:

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 Helloworld Travel 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 Helloworld Travel is currently mispriced by the market.

3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Helloworld Travel? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.