Since PAX Global Technology Limited (HKG:327) released its earnings in December 2018, analysts seem fairly confident, with profits predicted to increase by 13% next year against the past 5-year average growth rate of 6.4%. With trailing-twelve-month net income at current levels of HK$522m, we should see this rise to HK$589m in 2020. Below is a brief commentary around PAX Global Technology’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Exciting times ahead?
The longer term view from the 3 analysts covering 327 is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of 327’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 15% based on the most recent earnings level of HK$522m to the final forecast of HK$810m by 2022. This leads to an EPS of HK$0.73 in the final year of projections relative to the current EPS of HK$0.47. Margins are currently sitting at 12%, which is expected to expand to 13% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For PAX Global Technology, I’ve compiled three relevant aspects 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 PAX Global Technology 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 PAX Global Technology is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of PAX Global Technology? 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 firstname.lastname@example.org. 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.