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How Do Analysts See Sanne Group plc (LON:SNN) Performing In The Next Couple Of Years?

Simply Wall St

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The latest earnings update Sanne Group plc (LON:SNN) released in December 2018 showed that the business gained from a slight tailwind, leading to a single-digit earnings growth of 0.2%. Below, I've laid out key numbers on how market analysts view Sanne Group's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Sanne Group

Analysts' expectations for this coming year seems positive, with earnings rising by a robust 34%. This growth seems to continue into the following year with rates arriving at double digit 72% compared to today’s earnings, and finally hitting UK£38m by 2022.

LSE:SNN Past and Future Earnings, June 4th 2019

Although it’s useful to be aware of the rate of growth each year relative to today’s value, it may be more insightful to evaluate the rate at which the business is moving on average every year. The pro of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Sanne Group's earnings trajectory over time, 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 24%. This means, we can presume Sanne Group will grow its earnings by 24% every year for the next few years.

Next Steps:

For Sanne Group, I've put together three key aspects you should look at:

  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 SNN 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 SNN is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SNN? 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 editorial-team@simplywallst.com. 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.