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Best World International Limited's (SGX:CGN) released its most recent earnings update in December 2018, which showed that the business experienced a strong tailwind, eventuating to a double-digit earnings growth of 31%. Below, I've laid out key numbers on how market analysts predict Best World International's earnings growth trajectory over the next couple of 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.
View our latest analysis for Best World International
Market analysts' consensus outlook for the upcoming year seems positive, with earnings growing by a robust 30%. However, earnings is forecasted to fall thereafter, reaching S$78m in 2022.
While it’s helpful to understand the growth each year relative to today’s value, it may be more beneficial analyzing the rate at which the company is rising or falling on average every year. The advantage of this approach is that we can get a bigger picture of the direction of Best World International's earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute this rate, I've inserted 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 1.9%. This means that, we can assume Best World International will grow its earnings by 1.9% every year for the next few years.
Next Steps:
For Best World International, I've put together three fundamental factors you should further research:
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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 CGN 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 CGN 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 CGN? 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.