What To Expect From Beadell Resources Limited’s (ASX:BDR) Earnings Over The Next Year?

As per analysts covering Beadell Resources Limited (ASX:BDR) the earnings are expected to decrease -17.1% in the next 12 months. What are the important facts you need to know? I’m going to look at the latest data and analyse the future of this stock in more detail. View our latest analysis for Beadell Resources

How is BDR going to perform in the future?

According to the analysts covering the company the next three years should bring some good growth prospects for Beadell Resources. The estimates for earnings per share range from $0.02 to $0.08 with an average expectation of 71.1% growth.

Beadell Resources (ASX:BDR) Past Future Earnings Mar 29th 17
Beadell Resources (ASX:BDR) Past Future Earnings Mar 29th 17

In the same period revenue is expected to grow from $239 Million to $246 Million in 2019 and profit is predicted to slightly grow from $22 M to $25 M in 2019, roughly growing 1.1x. Margins are predicted to be a respectable 10.2% during this time as well.

Is there any basis for growth?

With Return on Equity of 12.6% Beadell Resources has performed better than the Materials industry average of 9.98%, whilst shareholders would consider this acceptable no doubt they are hoping for an improvement in the coming years. Slightly concerning, this metric is not expected to improve with analysts predicting ROE in 3 years to be 6.6%.

Beadell Resources (ASX:BDR) Future Perf Mar 29th 17
Beadell Resources (ASX:BDR) Future Perf Mar 29th 17

Return on equity (ROE) is a measure of how much profit (net income) a company makes as a percentage of the shareholders equity. Equity is made up of funds from the original issuing of shares and any retained earnings from previous financial years. It varies considerably across sectors, for this reason it is important to asses a stocks ROE relative to its industry. Whilst it is true that the higher the ROE the better the company is performing, ROE does have a weakness. A stock with a disproportionate amount of debt can lead to a small equity base. Thus, a small amount of net income (the numerator) could still produce a high ROE off a modest equity base (the denominator). For this reason investors should always consider the debt situation in conjunction with ROE.

Final words

Beadell Resources may have a few turbulent years in front of it but despite (or maybe because of) that it could still be offering an interesting investment opportunity. I recommend you see our latest FREE analysis to find out!

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