After Money3 Corporation Limited’s (ASX:MNY) earnings announcement in June 2018, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 9.8% next year against the higher past 5-year average growth rate of 35%. Presently, with latest-twelve-month earnings at AU$32m, we should see this growing to AU$35m by 2019. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
View our latest analysis for Money3
What can we expect from Money3 in the longer term?
The longer term expectations from the 3 analysts of MNY is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. 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 MNY’s earnings growth over these next few years.
This results in an annual growth rate of 12% based on the most recent earnings level of AU$32m to the final forecast of AU$48m by 2021. EPS reaches A$0.27 in the final year of forecast compared to the current A$0.20 EPS today. The main reason for growth is a result of cost cutting activities, as revenues is expected to grow much slower than earnings. Margins is currently sitting at 26%, which is expected to expand to 31% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Money3, I’ve compiled three fundamental aspects you should further research:
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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 Money3 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 Money3 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 Money3? 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.