Yahoo Finance How Do Analysts See IDP Education Limited (ASX:IEL) Performing Over The Next Year?
After IDP Education Limited’s (ASX:IEL) earnings announcement in June 2018, the consensus outlook from analysts appear fairly confident, with profits predicted to increase by 21% next year relative to the past 5-year average growth rate of 15%. Presently, with latest-twelve-month earnings at AU$52m, we should see this growing to AU$62m by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for IDP Education in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
View our latest analysis for IDP Education
How is IDP Education going to perform in the near future?
Over the next three years, it seems the consensus view of the 5 analysts covering IEL is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of IEL’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 2021, IEL’s earnings should reach AU$92m, from current levels of AU$52m, resulting in an annual growth rate of 17%. This leads to an EPS of A$0.36 in the final year of projections relative to the current EPS of A$0.21. Growth in the bottom line seems to suggest reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. Margins is currently sitting at 11%, which is expected to expand to 13% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For IDP Education, there are three essential factors you should further examine:
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 IDP Education 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 IDP Education is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of IDP Education? 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.
