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Looking at EBOS Group Limited's (NZSE:EBO) earnings update in December 2018, it seems that analyst expectations are fairly bearish, with profits predicted to rise by 9.9% next year compared with the higher past 5-year average growth rate of 13%. Currently with trailing-twelve-month earnings of AU$137m, we can expect this to reach AU$151m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for EBOS Group
How will EBOS Group perform in the near future?
Longer term expectations from the 6 analysts covering EBO’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for EBO, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of AU$137m and the final forecast of AU$184m by 2022, the annual rate of growth for EBO’s earnings is 10%. This leads to an EPS of A$1.18 in the final year of projections relative to the current EPS of A$0.90. In 2022, EBO's profit margin will have expanded from 2.0% to 2.2%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For EBOS Group, I've put together three essential 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 EBOS Group 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 EBOS Group 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 EBOS Group? 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.