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In December 2018, Sinosoft Technology Group Limited (HKG:1297) released its earnings update. Generally, analysts seem fairly confident, with earnings expected to grow by 22% in the upcoming year compared with the past 5-year average growth rate of 17%. Presently, with latest-twelve-month earnings at CN¥236m, we should see this growing to CN¥288m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Sinosoft Technology Group in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
See our latest analysis for Sinosoft Technology Group
How will Sinosoft Technology Group perform in the near future?
The view from 2 analysts over the next three years 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 1297's earnings growth over these next few years.
By 2022, 1297's earnings should reach CN¥473m, from current levels of CN¥236m, resulting in an annual growth rate of 23%. EPS reaches CN¥0.43 in the final year of forecast compared to the current CN¥0.19 EPS today. Margins are currently sitting at 33%, which is expected to expand to 39% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Sinosoft Technology Group, there are three fundamental aspects 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 Sinosoft Technology 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 Sinosoft Technology 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 Sinosoft Technology 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.