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Looking at Steadfast Group Limited’s (ASX:SDF) earnings update in June 2018, analysts seem cautiously bearish, with profits predicted to rise by 16% next year against the higher past 5-year average growth rate of 36%. By 2020, we can expect Steadfast Group’s bottom line to reach AU$88m, a jump from the current trailing-twelve-month of AU$76m. Below is a brief commentary around Steadfast Group’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for Steadfast Group
How will Steadfast Group perform in the near future?
The longer term view from the 7 analysts covering SDF is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of SDF’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, SDF’s earnings should reach AU$104m, from current levels of AU$76m, resulting in an annual growth rate of 10%. This leads to an EPS of A$0.14 in the final year of projections relative to the current EPS of A$0.099. In 2022, SDF’s profit margin will have expanded from 13% to 14%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Steadfast Group, there are three pertinent 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 Steadfast 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 Steadfast 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 Steadfast 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. On rare occasion, data errors may occur. Thank you for reading.