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The latest earnings update Beijing Enterprises Clean Energy Group Limited (HKG:1250) released in December 2018 confirmed that the company experienced a major headwind with earnings deteriorating by -19%. Below is a brief commentary on my key takeaways on how market analysts view Beijing Enterprises Clean Energy Group's earnings growth outlook 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 Beijing Enterprises Clean Energy Group

Market analysts' prospects for the coming year seems pessimistic, with earnings reducing by a double-digit -19%. However, the next few years show a contrast, with earnings growth becoming positive in 2021, with the bottom line increasing to HK$1.4b in 2022.

Even though it’s helpful to understand the growth year by year relative to today’s value, it may be more valuable evaluating the rate at which the business is rising or falling on average every year. The pro of this method is that we can get a better picture of the direction of Beijing Enterprises Clean Energy Group'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've appended 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 3.2%. This means that, we can anticipate Beijing Enterprises Clean Energy Group will grow its earnings by 3.2% every year for the next couple of years.

Next Steps:

For Beijing Enterprises Clean Energy Group, I've compiled three pertinent aspects you should look at:

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 1250 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 1250 is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1250? 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.