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SSY Group Limited's (HKG:2005) announced its latest earnings update in December 2018, which indicated that the business benefited from a robust tailwind, eventuating to a double-digit earnings growth of 37%. Below, I've presented key growth figures on how market analysts view SSY Group's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for SSY Group
Analysts' outlook for next year seems buoyant, with earnings expanding by a robust 29%. This growth seems to continue into the following year with rates arriving at double digit 55% compared to today’s earnings, and finally hitting HK$1.6b by 2022.
Although it is informative knowing the growth rate year by year relative to today’s level, it may be more beneficial to estimate the rate at which the company is moving every year, on average. The pro of this approach is that we can get a better picture of the direction of SSY Group's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put 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 18%. This means that, we can expect SSY Group will grow its earnings by 18% every year for the next couple of years.
Next Steps:
For SSY Group, I've compiled three essential aspects you should look at:
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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 2005 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 2005 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 2005? 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.