Stock Spirits Group PLC’s (LON:STCK) most recent earnings update in September 2018 revealed that the company experienced a strong tailwind, eventuating to a double-digit earnings growth of 19%. Below is a brief commentary on my key takeaways on how market analysts perceive Stock Spirits Group’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Check out our latest analysis for Stock Spirits Group
Analysts’ expectations for the coming year seems optimistic, with earnings rising by a robust 41%. This growth seems to continue into the following year with rates arriving at double digit 54% compared to today’s earnings, and finally hitting €42m by 2022.
Even though it’s useful to understand the growth each year relative to today’s value, it may be more beneficial gauging the rate at which the earnings are moving every year, on average. The benefit of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Stock Spirits Group’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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 11%. This means that, we can anticipate Stock Spirits Group will grow its earnings by 11% every year for the next few years.
Next Steps:
For Stock Spirits Group, I’ve put together three fundamental factors 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 STCK 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 STCK 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 STCK? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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