In This Article:
A-Living Services Co Ltd.’s (SEHK:3319) latest earnings update in December 2017 suggested that the business gained from a large tailwind, eventuating to a high double-digit earnings growth of 80.32%. Below is a brief commentary on my key takeaways on how market analysts perceive A-Living Services’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for A-Living Services
Analysts’ expectations for next year seems buoyant, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally arriving at CN¥1.24B in 2021.
While it’s helpful to understand the rate of growth year by year relative to today’s level, it may be more insightful evaluating the rate at which the business is growing on average every year. The benefit of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of A-Living Services’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve appended 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 38.95%. This means that, we can assume A-Living Services will grow its earnings by 38.95% every year for the next few years.
Next Steps:
For A-Living Services, 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 3319 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 3319 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 3319? 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.