Yahoo Finance Synthomer plc (LON:SYNT): Poised For Long-Term Success?
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The most recent earnings update Synthomer plc's (LON:SYNT) released in December 2018 signalled that the company gained from a strong tailwind, leading to a double-digit earnings growth of 35%. Below, I've laid out key numbers on how market analysts predict Synthomer's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for Synthomer
Market analysts' prospects for next year seems rather muted, with earnings rising by a single digit 9.7%. The growth outlook in the following year seems much more positive with rates reaching double digit 13% compared to today’s earnings, and finally hitting UK£122m by 2022.
Although it is useful to understand the rate of growth each year relative to today’s level, it may be more insightful analyzing the rate at which the earnings are moving on average every year. The advantage of this technique is that we can get a better picture of the direction of Synthomer's earnings trajectory over the long run, irrespective of near term fluctuations, 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 6.3%. This means, we can expect Synthomer will grow its earnings by 6.3% every year for the next couple of years.
Next Steps:
For Synthomer, I've compiled three important 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 SYNT 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 SYNT is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SYNT? 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.
