Yahoo Finance What Do Investors Need To Know About Regis Healthcare Limited’s (ASX:REG) Future?
Looking at Regis Healthcare Limited’s (ASX:REG) earnings update in June 2018, analyst consensus outlook seem bearish, with profits predicted to drop by -4.9% next year relative to the past 5-year average growth rate of 26%. With trailing-twelve-month net income at current levels of AU$54m, the consensus growth rate suggests that earnings will decline to AU$51m by 2019. 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 Regis Healthcare
How is Regis Healthcare going to perform in the near future?
Over the next three years, it seems the consensus view of the 5 analysts covering REG 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 get an idea of the overall earnings growth trend for REG, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
By 2021, REG’s earnings should reach AU$65m, from current levels of AU$54m, resulting in an annual growth rate of 7.6%. This leads to an EPS of A$0.22 in the final year of projections relative to the current EPS of A$0.18. Growth in the bottom line seems to suggest cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. However, the near term margin expansion is expected to shrink heading into 2021, from the current levels of 9.1% to 9.0%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Regis Healthcare, 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 Regis Healthcare 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 Regis Healthcare is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Regis Healthcare? 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.
