Yahoo Finance Japara Healthcare Limited (ASX:JHC): What’s The Analyst Consensus Outlook?
In June 2018, Japara Healthcare Limited (ASX:JHC) announced its most recent earnings update, which showed that the business experienced a substantial headwind with earnings deteriorating by -21%. Below is my commentary, albeit very simple and high-level, on how market analysts predict Japara Healthcare’s earnings growth trajectory over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Japara Healthcare
Analysts’ outlook for the upcoming year seems pessimistic, with earnings reducing by -5.8%. But in the following year, there is a complete contrast in performance, with arriving at double digit 7.1% compared to today’s level and continues to increase to AU$28m in 2021.
Even though it’s informative understanding the growth rate each year relative to today’s level, it may be more insightful to determine the rate at which the earnings are growing on average every year. The benefit of this approach is that we can get a bigger picture of the direction of Japara Healthcare’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve inserted 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 6.9%. This means, we can expect Japara Healthcare will grow its earnings by 6.9% every year for the next couple of years.
Next Steps:
For Japara Healthcare, I’ve compiled 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 JHC 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 JHC is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of JHC? 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.
