Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Looking at Bravura Solutions Limited’s (ASX:BVS) earnings update in June 2018, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by 18% next year relative to the higher past 5-year average growth rate of 56%. With trailing-twelve-month net income at current levels of AU$27m, we should see this rise to AU$32m in 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Bravura Solutions in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Check out our latest analysis for Bravura Solutions
How will Bravura Solutions perform in the near future?
The longer term view from the 3 analysts covering BVS is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of BVS’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.
From the current net income level of AU$27m and the final forecast of AU$40m by 2022, the annual rate of growth for BVS’s earnings is 13%. EPS reaches A$0.19 in the final year of forecast compared to the current A$0.13 EPS today. Margins are currently sitting at 12%, which is expected to expand to 14% by 2022.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Bravura Solutions, I’ve compiled three essential factors you should further research:
- 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 Bravura Solutions 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 Bravura Solutions is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Bravura Solutions? 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.