Yahoo Finance What Should You Know About Johns Lyng Group Limited’s (ASX:JLG) Future?
Johns Lyng Group Limited’s (ASX:JLG) most recent earnings update in June 2018 indicated that the company gained from a slight tailwind, eventuating to a single-digit earnings growth of 6.0%. Today I want to provide a brief commentary on how market analysts perceive Johns Lyng Group’s earnings growth trajectory over the next few 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.
View our latest analysis for Johns Lyng Group
Analysts’ expectations for the upcoming year seems optimistic, with earnings growing by a robust 32.2%. However, earnings is expected to fall slightly in the following year before rising again to AU$13.5m in 2021.
Although it is informative understanding the growth rate each year relative to today’s value, it may be more insightful to estimate the rate at which the earnings are rising or falling on average every year. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of Johns Lyng Group’s earnings trajectory over time, be more volatile. To calculate this rate, I put 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 4.9%. This means that, we can presume Johns Lyng Group will grow its earnings by 4.9% every year for the next couple of years.
Next Steps:
For Johns Lyng Group, I’ve put together three fundamental aspects 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 JLG 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 JLG is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of JLG? 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.
