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Grand Baoxin Auto Group Limited's (HKG:1293) released its most recent earnings update in December 2018, which indicated that the business faced a immense headwind with earnings falling by -30%. Below, I've presented key growth figures on how market analysts view Grand Baoxin Auto Group's earnings growth trajectory 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 Grand Baoxin Auto Group
Analysts' expectations for the upcoming year seems optimistic, with earnings expanding by a robust 20%. This growth seems to continue into the following year with rates arriving at double digit 61% compared to today’s earnings, and finally hitting CN¥964m by 2022.
Although it is useful to understand the rate of growth each year relative to today’s value, it may be more valuable determining the rate at which the company is growing on average every year. The pro of this approach is that we can get a better picture of the direction of Grand Baoxin Auto Group's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put 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 19%. This means that, we can presume Grand Baoxin Auto Group will grow its earnings by 19% every year for the next couple of years.
Next Steps:
For Grand Baoxin Auto Group, I've put together three pertinent 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 1293 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 1293 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 1293? 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.