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Since IRESS Limited (ASX:IRE) released its earnings in December 2018, analysts seem fairly confident, with profits predicted to increase by 19% next year relative to the past 5-year average growth rate of 12%. Currently with trailing-twelve-month earnings of AU$64m, we can expect this to reach AU$76m by 2020. Below is a brief commentary on the longer term outlook the market has for IRESS. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
View our latest analysis for IRESS
How will IRESS perform in the near future?
The view from 8 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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.
By 2022, IRE's earnings should reach AU$100m, from current levels of AU$64m, resulting in an annual growth rate of 15%. EPS reaches A$0.59 in the final year of forecast compared to the current A$0.38 EPS today. With a current profit margin of 14%, this movement will result in a margin of 18% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For IRESS, I've put together three key factors you should look at:
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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 IRESS 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 IRESS 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 IRESS? 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.