Yahoo Finance Strix Group Plc (LON:KETL): What Are The Future Prospects?
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Looking at Strix Group Plc's (LON:KETL) earnings update in December 2018, analysts seem cautiously optimistic, with earnings expected to grow by 0.9% in the upcoming year compared with the past 5-year average growth rate of -1.2%. Presently, with latest-twelve-month earnings at UK£23m, we should see this growing to UK£23m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Check out our latest analysis for Strix Group
Exciting times ahead?
The longer term view from the 4 analysts covering KETL is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 5.9% based on the most recent earnings level of UK£23m to the final forecast of UK£27m by 2022. This leads to an EPS of £0.15 in the final year of projections relative to the current EPS of £0.12. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 25% to 24% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Strix Group, I've put together three essential factors 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 Strix 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 Strix Group is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Strix 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!
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.
