On 30 June 2019, LSL Property Services plc (LON:LSL) announced its earnings update. Overall, analysts seem highly optimistic, with profits predicted to ramp up by an impressive 59% next year, against the past 5-year average growth rate of -1.0%. By 2020, we can expect LSL Property Services’s bottom line to reach UK£28m, a jump from the current trailing-twelve-month of UK£18m. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How will LSL Property Services perform in the near future?
Over the next three years, it seems the consensus view of the 3 analysts covering LSL is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for LSL, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
By 2022, LSL's earnings should reach UK£44m, from current levels of UK£18m, resulting in an annual growth rate of 20%. EPS reaches £0.23 in the final year of forecast compared to the current £0.17 EPS today. In 2022, LSL's profit margin will have expanded from 5.5% to 14%.
Future outlook is only one aspect when you're building an investment case for a stock. For LSL Property Services, there are three relevant 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 LSL Property Services 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 LSL Property Services is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of LSL Property Services? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.