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Looking at boohoo group plc's (LON:BOO) earnings update on 28 February 2019, analysts seem fairly confident, as a 47% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 33%. Presently, with latest-twelve-month earnings at UK£38m, we should see this growing to UK£56m by 2020. Below is a brief commentary on the longer term outlook the market has for boohoo group. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Check out our latest analysis for boohoo group
What can we expect from boohoo group in the longer term?
The longer term expectations from the 17 analysts of BOO is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 22% based on the most recent earnings level of UK£38m to the final forecast of UK£76m by 2022. EPS reaches £0.065 in the final year of forecast compared to the current £0.033 EPS today. Margins are currently sitting at 4.4%, approximately the same as previous years. With analysts forecasting revenue growth of 1.06149 and BOO's net income growth expected to roughly track that, this company may add value for shareholders over time.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For boohoo group, I've compiled 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 boohoo 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 boohoo 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 boohoo 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.