Yahoo Finance What Should You Know About Link Administration Holdings Limited’s (ASX:LNK) Earnings Trend?
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The latest earnings announcement Link Administration Holdings Limited (ASX:LNK) released in June 2018 suggested that the business gained from a strong tailwind, leading to a high double-digit earnings growth of 67%. Below, I’ve laid out key numbers on how market analysts view Link Administration Holdings’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Check out our latest analysis for Link Administration Holdings
Market analysts’ consensus outlook for the coming year seems positive, with earnings rising by a robust 46%. However, earnings is expected to fall slightly in the following year before rising again to AU$272m in 2022.
Although it’s useful to understand the growth rate each year relative to today’s figure, it may be more beneficial evaluating the rate at which the business is growing on average every year. The benefit of this approach is that we can get a better picture of the direction of Link Administration Holdings’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To calculate this rate, I’ve inserted 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 16%. This means, we can anticipate Link Administration Holdings will grow its earnings by 16% every year for the next couple of years.
Next Steps:
For Link Administration Holdings, there are 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 LNK 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 LNK is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of LNK? 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.
