What Should We Expect From Wagners Holding Company Limited’s (ASX:WGN) Earnings In The Years Ahead?

Wagners Holding Company Limited’s (ASX:WGN) announced its latest earnings update in August 2019, which indicated that the business endured a immense headwind with earnings deteriorating by -48%. Below, I’ve presented key growth figures on how market analysts perceive Wagners Holding’s earnings growth trajectory over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

View our latest analysis for Wagners Holding

Market analysts’ consensus outlook for the coming year seems pessimistic, with earnings reducing by -2.2%. But in the following year, there is a complete contrast in performance, with reaching double digit 59% compared to today’s level and continues to increase to AU$25m in 2022.

ASX:WGN Past and Future Earnings, August 29th 2019
ASX:WGN Past and Future Earnings, August 29th 2019

Even though it’s helpful to understand the growth rate each year relative to today’s value, it may be more beneficial evaluating the rate at which the company is growing on average every year. The benefit of this approach is that we can get a better picture of the direction of Wagners Holding’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve inserted 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 25%. This means that, we can expect Wagners Holding will grow its earnings by 25% every year for the next couple of years.

Next Steps:

For Wagners Holding, I’ve compiled three key 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 WGN 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 WGN is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of WGN? 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 editorial-team@simplywallst.com. 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.