The latest earnings update Kingboard Holdings Limited (HKG:148) released in December 2017 revealed that the company benefited from a strong tailwind, eventuating to a double-digit earnings growth of 11.3%. Below, I’ve laid out key growth figures on how market analysts predict Kingboard Holdings’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. 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 Kingboard Holdings
Market analysts’ consensus outlook for the coming year seems pessimistic, with earnings decreasing by -4.0%. Beyond this, earnings are expected to continue to be below today’s level, with a reduction of -27.4% in 2020, eventually reaching HK$4.06b in 2021.
While it is informative understanding the growth each year relative to today’s figure, it may be more beneficial to evaluate the rate at which the company is rising or falling on average every year. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Kingboard Holdings’s earnings trajectory over time, be more volatile. To compute 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 -9.7%. This means, we can anticipate Kingboard Holdings will chip away at a rate of -9.7% every year for the next few years.
Next Steps:
For Kingboard Holdings, there are 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 148 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 148 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 148? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.