Yahoo Finance Ashtead Group plc (LON:AHT): Immense Growth Potential?
Based on Ashtead Group plc's (LON:AHT) earnings update on 30 April 2019, the consensus outlook from analysts appear somewhat bearish, as a 13% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 30%. By 2020, we can expect Ashtead Group’s bottom line to reach UK£904m, a jump from the current trailing-twelve-month of UK£797m. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
View our latest analysis for Ashtead Group
What can we expect from Ashtead Group in the longer term?
Longer term expectations from the 16 analysts covering AHT’s stock is one of 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 AHT'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 2022, AHT's earnings should reach UK£1.0b, from current levels of UK£797m, resulting in an annual growth rate of 7.0%. EPS reaches £2.44 in the final year of forecast compared to the current £1.66 EPS today. This initial high-growth revenue squeezes AHT's margins. However, analysts are expecting earnings growth to catch up, and current margins of 18% to expand to 18% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Ashtead Group, I've compiled 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 Ashtead Group 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 Ashtead Group is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Ashtead Group? 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.
