RXP Services Limited (ASX:RXP) is expected to deliver a solid 47.40% in earnings growth per share over the next three years. With the recent EPS being A$0.083, expected growth will push the upcoming EPS to A$0.122. Today I will look at the latest data in order to investigate whether this expected growth rate is plausible. View our latest analysis for RXP Services
What can we expect from RXP Services Limited (ASX:RXP) in the future?
RXP is covered by 3 analysts who by consensus are expecting earnings to increase from today’s level of A$0.083 to A$0.122 over the next couple of years. This indicates a relatively solid earnings per share growth rate of 47.40% over the next few years, which is an optimistic outlook in the near term. During the same time revenue is expected to grow from A$141M to A$198M and net income is predicted to escalate from A$12M to A$17M in the next couple of years, growing by 47.40%. Furthermore, margins are on track to be a respectable 10.00% in the future.
Basis for the growth
The past can be a helpful indicator for future performance for a stock. We can determine whether this level of expected growth is highly excessive or whether the company has consistently exhibited strength. RXP’s triple-digit earnings growth the past couple of years indicates that the company’s past performance will continue to persist into the future. This means RXP has already proven its capacity to grow at a robust rate, which should give investors higher conviction of analysts’ consensus prediction for the company’s future growth going forward.
Next Steps:
For RXP, there are three fundamental factors you should further research:
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 RXP 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 RXP is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of RXP? 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.