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Looking at Kingdee International Software Group Company Limited's (HKG:268) earnings update in December 2018, analyst consensus outlook appear cautiously subdued, as a 11% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 18%. Presently, with latest-twelve-month earnings at CN¥412m, we should see this growing to CN¥456m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Kingdee International Software Group in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
View our latest analysis for Kingdee International Software Group
How will Kingdee International Software Group perform in the near future?
Longer term expectations from the 19 analysts covering 268’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of 268's earnings growth over these next few years.
From the current net income level of CN¥412m and the final forecast of CN¥730m by 2022, the annual rate of growth for 268’s earnings is 19%. EPS reaches CN¥0.22 in the final year of forecast compared to the current CN¥0.13 EPS today. Margins are currently sitting at 15%, approximately the same as previous years. With analysts forecasting revenue growth of 0.79976 and 268'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 Kingdee International Software Group, I've compiled three important 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 Kingdee International Software 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 Kingdee International Software 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 Kingdee International Software 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.