Over the Wire Holdings Limited (ASX:OTW)’s impressive earnings growth per share is expected to be a big 132.06% over the next three years. Presently, with an EPS of A$0.083, we can expect an upcoming EPS of A$0.192. I am going to look at the latest data on OTW to assess whether this expected growth is reasonable. View our latest analysis for Over the Wire Holdings
How is Over the Wire Holdings going to perform in the future?
Over the Wire Holdings’s growth potential is very attractive. OTW is covered by 3 analysts who, by consensus, are bullish with earnings estimated to increase from current levels of A$0.083 to A$0.192 over the next couple of years. This indicates a relatively solid earnings per share growth rate of 132.06% over the next few years, which is an optimistic outlook in the near term. In the same period we will see the revenue grow rapidly from A$34M to A$71M and profit is predicted to grow from A$4M to A$8M in the next couple of years, more than doubling from the most recent level. Furthermore, margins are on track to be a respectable 11.56% in the future.
Is the growth built on solid basis?
The past can be an insightful indicator for future performance for a stock. We can determine whether this level of expected growth is sustainable and whether the company continues to go from strength to strength. OTW’s earnings growth the past couple of years was 23.62% which indicates that the company’s past performance is quite revealing of future outcome. This means OTW has already proven its capacity to grow at a strong rate, which should give investors higher conviction of analysts’ consensus prediction for the company’s future growth going forward.
Next Steps:
For OTW, I’ve put together three key aspects you should further examine:
1. 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.
2. Valuation: What is OTW 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 OTW is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of OTW? 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 pass 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.