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In December 2018, Aptitude Software Group plc (LON:APTD) announced its most recent earnings update, which indicated that the business gained from a robust tailwind, leading to a double-digit earnings growth of 31%. Investors may find it useful to understand how market analysts predict Aptitude Software Group's earnings growth outlook over the next couple of 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.
Check out our latest analysis for Aptitude Software Group
Analysts' outlook for this coming year seems pessimistic, with earnings decreasing by a double-digit -25%. Over the medium term, earnings will begin to improve, rising year on year, and reaching UK£14m by 2022.
Although it’s useful to understand the growth rate each year relative to today’s figure, it may be more beneficial evaluating the rate at which the earnings are moving every year, on average. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Aptitude Software Group's earnings trajectory over time, which may be more relevant for long term investors. To calculate 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 2.1%. This means that, we can presume Aptitude Software Group will grow its earnings by 2.1% every year for the next couple of years.
Next Steps:
For Aptitude Software Group, I've put together three relevant factors you should look at:
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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 APTD 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 APTD 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 APTD? 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.