In December 2018, Infomedia Ltd. (ASX:IFM) released its earnings update. Generally, analyst consensus outlook appear cautiously optimistic, with profits predicted to increase by 21% next year compared with the past 5-year average growth rate of 0.7%. Presently, with latest-twelve-month earnings at AU$13m, we should see this growing to AU$16m by 2020. Below is a brief commentary on the longer term outlook the market has for Infomedia. For those interested in more of an analysis of the company, you can research its fundamentals here.
What can we expect from Infomedia in the longer term?
Longer term expectations from the 4 analysts covering IFM’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of IFM’s earnings growth over these next few years.
From the current net income level of AU$13m and the final forecast of AU$23m by 2022, the annual rate of growth for IFM’s earnings is 19%. This leads to an EPS of A$0.073 in the final year of projections relative to the current EPS of A$0.042. In 2022, IFM’s profit margin will have expanded from 18% to 22%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Infomedia, there are three relevant aspects you should further examine:
- Valuation: What is Infomedia 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 Infomedia is currently mispriced by the market.
- Future Earnings: How does Infomedia’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Infomedia? 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 email@example.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.