Yahoo Finance What Do Analysts Think About IPH Limited’s (ASX:IPH) Future?
IPH Limited’s (ASX:IPH) latest earnings update in June 2018 showed that the company faced a minor headwind with earnings falling from AU$42.89m to AU$40.67m, a change of -5.18%. Below, I’ve laid out key growth figures on how market analysts predict IPH’s earnings growth outlook over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
View our latest analysis for IPH
Market analysts’ prospects for next year seems positive, with earnings climbing by a robust 37.79%. This growth seems to continue into the following year with rates arriving at double digit 48.19% compared to today’s earnings, and finally hitting AU$64.86m by 2021.
Although it’s useful to be aware of the rate of growth each year relative to today’s level, it may be more valuable to estimate the rate at which the earnings are rising or falling on average every year. The advantage of this approach is that it ignores near term flucuations and accounts for the overarching direction of IPH’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 13.85%. This means that, we can expect IPH will grow its earnings by 13.85% every year for the next few years.
Next Steps:
For IPH, I’ve put together three key 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 IPH 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 IPH is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of IPH? 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.
