In March 2018, Yoma Strategic Holdings Ltd (SGX:Z59) released its most recent earnings update. Generally, the consensus outlook from analysts appear fairly confident, as a 29.44% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 25.44%. Presently, with earnings at S$26.99M, we should see this growing to S$34.94M by 2019. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here. Check out our latest analysis for Yoma Strategic Holdings

Exciting times ahead?

The longer term expectations from the 4 analysts of Z59 is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for Z59, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

By 2021, Z59’s earnings should reach S$76.91M, from current levels of S$26.99M, resulting in an annual growth rate of 38.73%. EPS reaches SGD0.04 in the final year of forecast compared to the current SGD0.01 EPS today. Growth in the bottom line seems to suggest cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. However, the expansion of the current 25.05% margin is not expected to be sustained, as it begins to contract to 21.56% by the end of 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Yoma Strategic Holdings, I’ve put together three pertinent factors you should look at:

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 Yoma Strategic Holdings 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 Yoma Strategic Holdings is currently mispriced by the market.

3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Yoma Strategic Holdings? 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.