Yahoo Finance Workspace Group plc (LON:WKP): Set To Experience A Decrease In Earnings?
The latest earnings announcement Workspace Group plc (LON:WKP) released in March 2018 suggested that the company gained from a large tailwind, eventuating to a high double-digit earnings growth of 93.2%. Below is my commentary, albeit very simple and high-level, on how market analysts view Workspace Group’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. 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.
View our latest analysis for Workspace Group
Market analysts’ consensus outlook for the coming year seems positive, with earnings increasing by a robust 35.3%. However, earnings is forecasted to fall thereafter, reaching UK£119.4m in 2021.
Although it’s helpful to be aware of the growth each year relative to today’s figure, it may be more insightful gauging the rate at which the company is moving on average every year. The benefit of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Workspace Group’s earnings trajectory over time, be more volatile. To calculate this rate, I’ve inserted 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 -7.2%. This means, we can assume Workspace Group will chip away at a rate of -7.2% every year for the next couple of years.
Next Steps:
For Workspace Group, I’ve put together three pertinent 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 WKP 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 WKP is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of WKP? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
