How Do Analysts See Silver Lake Resources Limited (ASX:SLR) Performing In The Next Couple Of Years?

The latest earnings release Silver Lake Resources Limited's (ASX:SLR) announced in June 2018 confirmed that the business experienced a significant tailwind, more than doubling its earnings from the prior year. Below is a brief commentary on my key takeaways on how market analysts predict Silver Lake Resources's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for Silver Lake Resources

Market analysts' prospects for the upcoming year seems positive, with earnings expanding by a robust 18%. Earnings are predicted to peak in the following year, reaching AU$42m before decreasing in 2021

While it’s helpful to understand the growth rate year by year relative to today’s figure, it may be more insightful to evaluate the rate at which the business is moving on average every year. The advantage of this method is that it ignores near term flucuations and accounts for the overarching direction of Silver Lake Resources's earnings trajectory over time, fluctuate up and down. To calculate this rate, I've appended 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 26%. This means that, we can anticipate Silver Lake Resources will grow its earnings by 26% every year for the next few years.

Next Steps:

For Silver Lake Resources, there are three essential factors you should look at:

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 SLR 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 SLR is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SLR? 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.

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.