Yahoo Finance What Should We Expect From Medibank Private Limited’s (ASX:MPL) Earnings In The Years Ahead?
Medibank Private Limited’s (ASX:MPL) most recent earnings announcement in June 2018 confirmed that the company endured a slight headwind with earnings declining from AU$449.5m to AU$445.1m, a change of -1.0%. Below, I’ve presented key growth figures on how market analysts view Medibank Private’s earnings growth trajectory 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.
See our latest analysis for Medibank Private
Market analysts’ prospects for next year seems rather subdued, with earnings rising by a single digit 2.5%. The following years do not look much more exciting, with earnings reaching AU$463.9m before falling in 2021.
Although it is helpful to understand the rate of growth each year relative to today’s level, it may be more beneficial to evaluate the rate at which the earnings are growing every year, on average. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of Medibank Private’s earnings trajectory over time, be more volatile. To calculate this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 0.3%. This means that, we can assume Medibank Private will grow its earnings by 0.3% every year for the next few years.
Next Steps:
For Medibank Private, 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 MPL 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 MPL is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MPL? 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.
