Yahoo Finance What Should You Know About SRG Global Limited’s (ASX:SRG) Earnings Outlook?
SRG Global Limited’s (ASX:SRG) released its most recent earnings update in June 2018, which indicated that the business benefited from a slight tailwind, eventuating to a single-digit earnings growth of 7.0%. Below, I’ve laid out key numbers on how market analysts predict SRG Global’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
See our latest analysis for SRG Global
Market analysts’ consensus outlook for the coming year seems optimistic, with earnings climbing by a robust 37%. This growth in earnings is expected to continue at an exponential rate, bringing the bottom line up to AU$31m by 2021.
Although it’s useful to be aware of the growth each year relative to today’s figure, it may be more valuable to determine the rate at which the earnings are growing on average every year. The pro of this method is that we can get a better picture of the direction of SRG Global’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 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 30%. This means, we can anticipate SRG Global will grow its earnings by 30% every year for the next few years.
Next Steps:
For SRG Global, 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 SRG 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 SRG is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SRG? 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.
