TORC Oil & Gas Ltd. (TSE:TOG): What Does The Future Look Like?

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

In December 2018, TORC Oil & Gas Ltd. (TSE:TOG) announced its earnings update. Overall, it seems that analyst forecasts are substantially optimistic, with earnings expected to grow by a high double-digit of 94% in the upcoming year, relative to the past 5-year average growth rate of 11%. Presently, with latest-twelve-month earnings at CA$17m, we should see this growing to CA$33m by 2020. Below is a brief commentary on the longer term outlook the market has for TORC Oil & Gas. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for TORC Oil & Gas

Can we expect TORC Oil & Gas to keep growing?

The longer term expectations from the 4 analysts of TOG is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

TSX:TOG Past and Future Earnings, April 30th 2019
TSX:TOG Past and Future Earnings, April 30th 2019

This results in an annual growth rate of 25% based on the most recent earnings level of CA$17m to the final forecast of CA$32m by 2022. This leads to an EPS of CA$0.14 in the final year of projections relative to the current EPS of CA$0.082. In 2022, TOG’s profit margin will have expanded from 3.8% to 4.4%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For TORC Oil & Gas, I’ve put together three relevant factors you should further examine:

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