Yahoo Finance What Are Analysts Saying About Link Administration Holdings Limited’s (ASX:LNK) Future?
Since Link Administration Holdings Limited (ASX:LNK) released its earnings in June 2018, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 39% in the upcoming year, though this is noticeably lower than the historical 5-year average earnings growth of 46%. By 2019, we can expect Link Administration Holdings’s bottom line to reach AU$197m, a jump from the current trailing-twelve-month AU$142m. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Check out our latest analysis for Link Administration Holdings
Exciting times ahead?
The longer term view from the 9 analysts covering LNK is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of LNK’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.
From the current net income level of AU$142m and the final forecast of AU$231m by 2021, the annual rate of growth for LNK’s earnings is 14%. EPS reaches A$0.42 in the final year of forecast compared to the current A$0.29 EPS today. The primary reason for earnings growth is due to cost cutting activities, as revenues is expected to grow much slower than earnings. In 2021, LNK’s profit margin will have expanded from 12% to 16%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Link Administration Holdings, I’ve put together three pertinent factors you should look at:
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 Link Administration 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 Link Administration Holdings is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Link Administration 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
