Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In March 2019, AusNet Services Ltd (ASX:AST) released its most recent earnings announcement, which showed that the business experienced a immense headwind with earnings falling by -13%. Below, I've laid out key growth figures on how market analysts view AusNet Services's earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for AusNet Services
Market analysts' consensus outlook for the upcoming year seems rather subdued, with earnings expanding by a single digit 5.0%. The growth outlook in the following year seems much more buoyant with rates generating double digit 11% compared to today’s earnings, and finally hitting AU$296m by 2022.
While it is informative knowing the rate of growth each year relative to today’s level, it may be more beneficial evaluating the rate at which the company is moving on average every year. The pro of this approach is that we can get a better picture of the direction of AusNet Services'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 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 7.0%. This means, we can presume AusNet Services will grow its earnings by 7.0% every year for the next few years.
Next Steps:
For AusNet Services, there are three essential factors you should look at:
-
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.
-
Valuation: What is AST 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 AST is currently mispriced by the market.
-
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AST? 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.