What Should You Know About Aurelia Metals Limited’s (ASX:AMI) Earnings Trend?

Aurelia Metals Limited’s (ASX:AMI) most recent earnings announcement in June 2018 signalled that the company gained from a substantial tailwind, more than doubling its earnings from the prior year. Below, I’ve laid out key growth figures on how market analysts predict Aurelia Metals’s earnings growth outlook 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 Aurelia Metals

Market analysts’ consensus outlook for the upcoming year seems pessimistic, with earnings falling by a double-digit -15%. However, the following year shows a contrast, with earnings growth becoming positive at 2.5% compared to today’s earnings level. Earnings are then expected to decrease to AU$96m in 2022.

ASX:AMI Future Profit January 9th 19

While it is helpful to be aware of the growth year by year relative to today’s figure, it may be more valuable to estimate the rate at which the business is moving every year, on average. The advantage of this technique is that it ignores near term flucuations and accounts for the overarching direction of Aurelia Metals’s earnings trajectory over time, be more volatile. To compute 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 2.3%. This means, we can expect Aurelia Metals will grow its earnings by 2.3% every year for the next couple of years.

Next Steps:

For Aurelia Metals, there are three important aspects you should further research:

1. 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.

2. Valuation: What is AMI 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 AMI is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AMI? 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.