Yahoo Finance Strix Group Plc (LON:KETL): What's The Analyst Consensus Outlook?
The latest earnings announcement Strix Group Plc (LON:KETL) released in December 2018 confirmed that the company experienced a minor headwind with earnings falling from UK£25m to UK£23m, a change of -5.9%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Strix Group's earnings growth trajectory 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 Strix Group
Market analysts' prospects for the upcoming year seems rather subdued, with earnings climbing by a single digit 0.9%. The growth outlook in the following year seems much more buoyant with rates reaching double digit 13% compared to today’s earnings, and finally hitting UK£27m by 2022.
While it’s helpful to understand the growth rate each year relative to today’s level, it may be more valuable estimating the rate at which the earnings are moving on average every year. The advantage of this method is that we can get a better picture of the direction of Strix Group's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've inserted 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 5.9%. This means that, we can presume Strix Group will grow its earnings by 5.9% every year for the next couple of years.
Next Steps:
For Strix Group, there are three relevant aspects 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 KETL 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 KETL is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of KETL? 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.
