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What Should You Know About LSL Property Services plc's (LON:LSL) Earnings Trend?

Simply Wall St

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The latest earnings release LSL Property Services plc's (LON:LSL) announced in December 2018 confirmed that the business experienced a substantial headwind with earnings deteriorating by -46%. Below, I've laid out key growth figures on how market analysts perceive LSL Property Services's earnings growth outlook over the next couple of 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.

See our latest analysis for LSL Property Services

Market analysts' prospects for this coming year seems pessimistic, with earnings decreasing by a double-digit -38%. However, the next few years seem to illustrate a completely different picture, with expected earnings growth rates reaching double digit 20% compared to today’s level and continues to increase.

LSE:LSL Past and Future Earnings, April 3rd 2019

Even though it’s useful to be aware of the rate of growth each year relative to today’s value, it may be more insightful determining the rate at which the business is moving every year, on average. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of LSL Property Services'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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 11%. This means, we can expect LSL Property Services will grow its earnings by 11% every year for the next few years.

Next Steps:

For LSL Property Services, I've compiled three relevant factors you should further research:

  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 LSL 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 LSL is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of LSL? 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.