Yahoo Finance Will ALS Limited's (ASX:ALQ) Earnings Grow In The Next Couple Of Years?
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ALS Limited's (ASX:ALQ) latest earnings update in March 2019 revealed that the business experienced a substantial tailwind, more than doubling its earnings from the prior year. Below, I've laid out key growth figures on how market analysts view ALS's earnings growth outlook over the next few 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 ALS
Market analysts' consensus outlook for the coming year seems optimistic, with earnings climbing by a robust 18%. This growth seems to continue into the following year with rates reaching double digit 23% compared to today’s earnings, and finally hitting AU$222m by 2022.
Although it’s helpful to understand the growth rate year by year relative to today’s figure, it may be more beneficial to analyze the rate at which the business is moving every year, on average. The advantage of this method is that it ignores near term flucuations and accounts for the overarching direction of ALS's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've appended 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 4.8%. This means, we can presume ALS will grow its earnings by 4.8% every year for the next few years.
Next Steps:
For ALS, I've compiled three important aspects you should further research:
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.
Valuation: What is ALQ 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 ALQ is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ALQ? 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.
