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The latest earnings release Cityneon Holdings Limited’s (SGX:5HJ) announced in December 2017 revealed that the company experienced a significant tailwind, more than doubling its earnings from the prior year. Below is a brief commentary on my key takeaways on how market analysts predict Cityneon Holdings’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for Cityneon Holdings
Analysts’ expectations for next year seems positive, with earnings rising by a robust 44.49%. This growth seems to continue into the following year with rates arriving at double digit 72.70% compared to today’s earnings, and finally hitting S$30.02M by 2021.
While it is helpful to be aware of the growth rate each year relative to today’s level, it may be more insightful estimating the rate at which the earnings are moving on average every year. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Cityneon Holdings’s earnings trajectory over time, be more volatile. To compute 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 17.72%. This means that, we can assume Cityneon Holdings will grow its earnings by 17.72% every year for the next couple of years.
Next Steps:
For Cityneon Holdings, there are three relevant aspects you should further examine:
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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 5HJ 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 5HJ 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 5HJ? 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 pass 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.