Yahoo Finance What Should We Expect From Pets at Home Group Plc’s (LON:PETS) Earnings In The Next 12 Months?
In March 2018, Pets at Home Group Plc (LON:PETS) released its earnings update. Generally, analysts seem cautiously bearish, as a 9.8% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 35%. Presently, with latest-twelve-month earnings at UK£63m, we should see this growing to UK£69m by 2019. Below is a brief commentary on the longer term outlook the market has for at Home Group. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
See our latest analysis for at Home Group
How will at Home Group perform in the near future?
The longer term view from the 7 analysts covering PETS is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of PETS’s earnings growth over these next few years.
From the current net income level of UK£63m and the final forecast of UK£74m by 2021, the annual rate of growth for PETS’s earnings is 5.3%. This leads to an EPS of £0.15 in the final year of projections relative to the current EPS of £0.13. The main reason for growth is a result of cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 7.0%, this movement will result in a margin of 7.4% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For at Home Group, there are three relevant aspects you should further examine:
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 at Home Group 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 at Home Group is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of at Home Group? 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.
