Based on Alpha Financial Markets Consulting plc's (LON:AFM) earnings update in March 2019, analysts seem highly optimistic, with profits predicted to ramp up by an impressive 52% next year, compared with the historical 5-year average growth rate of 13%. By 2020, we can expect Alpha Financial Markets Consulting’s bottom line to reach UK£14m, a jump from the current trailing-twelve-month of UK£9.2m. 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.
Exciting times ahead?
Over the next three years, it seems the consensus view of the 4 analysts covering AFM 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 understand the overall trajectory of AFM's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of UK£9.2m and the final forecast of UK£17m by 2022, the annual rate of growth for AFM’s earnings is 19%. EPS reaches £0.17 in the final year of forecast compared to the current £0.091 EPS today. Margins are currently sitting at 12%, which is expected to expand to 15% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Alpha Financial Markets Consulting, there are 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 Alpha Financial Markets Consulting 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 Alpha Financial Markets Consulting is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Alpha Financial Markets Consulting? 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.