Yahoo Finance What Do Analysts Think About Pets at Home Group Plc’s (LON:PETS) Earnings Outlook?
In March 2018, Pets at Home Group Plc (LON:PETS) released its latest earnings announcement, which revealed that the company faced a significant headwind with earnings deteriorating by -17%. Today I want to provide a brief commentary on how market analysts perceive at Home Group’s earnings growth outlook over the next few years and whether the future looks brighter. 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.
Check out our latest analysis for at Home Group
Analysts’ expectations for next year seems rather muted, with earnings expanding by a single digit 9.8%. The growth outlook in the following year seems much more optimistic with rates generating double digit 15% compared to today’s earnings, and finally hitting UK£74m by 2021.
While it is useful to be aware of the rate of growth each year relative to today’s figure, it may be more valuable to gauge the rate at which the business is growing every year, on average. The pro of this approach is that we can get a better picture of the direction of at Home Group’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute 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 5.3%. This means that, we can anticipate at Home Group will grow its earnings by 5.3% every year for the next couple of years.
Next Steps:
For at Home Group, I’ve compiled three fundamental 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 PETS 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 PETS is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of PETS? 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.
