Yahoo Finance Will TT Electronics plc's (LON:TTG) Earnings Grow In The Year Ahead?
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Since TT Electronics plc (LON:TTG) released its earnings in December 2018, the consensus outlook from analysts appear highly confident, with profits predicted to ramp up by an impressive 61% next year, against the historical 5-year average growth rate of 34%. With trailing-twelve-month net income at current levels of UK£13m, we should see this rise to UK£21m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Check out our latest analysis for TT Electronics
Can we expect TT Electronics to keep growing?
The view from 7 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly 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.
From the current net income level of UK£13m and the final forecast of UK£32m by 2022, the annual rate of growth for TTG’s earnings is 20%. EPS reaches £0.20 in the final year of forecast compared to the current £0.080 EPS today. With a current profit margin of 3.0%, this movement will result in a margin of 6.1% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For TT Electronics, there are three relevant factors 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 TT Electronics 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 TT Electronics is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of TT Electronics? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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