How Do Analysts See LifeHealthcare Group Limited (ASX:LHC) Performing In Next 12 Months?
Simply Wall St
August 16, 2017
LifeHealthcare Group Limited (ASX:LHC) is expected to deliver a high single-digit 7.04% in earnings growth per share over the next year. Presently, with an EPS of $0.17, we can expect an upcoming EPS of around $0.19. A positive earnings growth may please investors on the surface, but it’s important to compare this expectation to LHC’s track record. This will give investors context as to whether the growth prospect is justified and bolstered by past trends. I am going to look at the latest data on LHC to assess whether this expected growth is reasonable. Check out our latest analysis for LifeHealthcare Group
How is LHC going to perform in the future?
Earnings per share are predicted to grow anywhere from $0.17 to $0.22 in a year’s time. This illustrates a relatively optimistic outlook in the near term, with a relatively solid consensus earnings per share growth rate of 7% over the next 1-2 years. In the same period revenue is expected to grow from $122 Million to $137 Million in 2019 and profits (net income) are predicted to slightly grow from $7 Million to $10 Million in 2019, roughly growing 1.4x. Margins are expected to be rather acceptable at 7.39%.
Is the growth built on solid basis?
The past can be an insightful indicator for future performance for a stock. We can determine whether this level of expected growth is illustrative of future headwinds or whether the company continues to grapple with higher growth. LHC delivered a relatively lower growth rate of 182.44%, which may indicate a more sustainable level of growth as the company comes off a high-growth period. On the other hand, a more pessimistic outlook questions the company’s ability to continue as a high performer.
LHC’s upcoming year could be stronger, given its robust performance in the past year. Imminent headwinds or strains with maintaining high earnings growth could be the attributing problems. But in order to properly assess the opportunity here, we also need to evaluate whether the stock has been over-penalized by the negative sentiment. If the market views the situation worse than it actually is, excessive discounting could make the stock an attractive investment. Is LHC an undervalued gem? Let’s find out in this free analysis report. If you are not interested in LHC anymore, you can use our free platform to see my list of over 150 other stocks with a high growth potential.