Analysts' expectations for next year seems buoyant, with earnings rising by a significant 68.85%. This high growth in earnings is expected to continue, bringing the bottom line up to $462.9M by 2020.
Even though it is helpful to understand the rate of growth year by year relative to today’s value, it may be more valuable to analyze the rate at which the business is rising or falling every year, on average. The advantage of this approach is that we can get a better picture of the direction of Oil Search's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 19.77%. This means, we can presume Oil Search will grow its earnings by 19.77% every year for the next couple of years.
Next Steps:
For Oil Search, I've compiled three pertinent factors you should further research:
1. 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.
2. Valuation: What is OSH 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 OSH is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of OSH? 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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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
