Sanne Group plc’s (LON:SNN) latest earnings update in December 2017 signalled that the company gained from a strong tailwind, leading to a double-digit earnings growth of 40.02%. Below, I’ve laid out key growth figures on how market analysts view Sanne Group’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. 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. View out our latest analysis for Sanne Group
Market analysts’ consensus outlook for the upcoming year seems rather subdued, with earnings climbing by a single digit 0.40%. The growth outlook in the following year seems much more optimistic with rates reaching double digit 32.20% compared to today’s earnings, and finally hitting UK£29.31m by 2021.
Although it’s useful to be aware of the growth rate year by year relative to today’s figure, it may be more valuable determining the rate at which the earnings are moving on average every year. The benefit of this method is that it ignores 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 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 17.68%. This means, we can expect Sanne Group will grow its earnings by 17.68% every year for the next few years.
For Sanne Group, there are three important aspects you should further research:
- 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 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.
- 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!
To help readers see pass 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.