What Do Analysts Think About Mortgage Advice Bureau (Holdings) PLC’s (LON:MAB1) Earnings Outlook?

In December 2018, Mortgage Advice Bureau (Holdings) PLC (LON:MAB1) announced its most recent earnings update, which confirmed that the company experienced a small tailwind, leading to a single-digit earnings growth of 9.5%. Below is my commentary, albeit very simple and high-level, on how market analysts view Mortgage Advice Bureau (Holdings)’s earnings growth outlook 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.

View our latest analysis for Mortgage Advice Bureau (Holdings)

Market analysts’ consensus outlook for this coming year seems positive, with earnings increasing by a robust 14%. This growth seems to continue into the following year with rates reaching double digit 33% compared to today’s earnings, and finally hitting UK£20m by 2022.

AIM:MAB1 Past and Future Earnings, April 12th 2019
AIM:MAB1 Past and Future Earnings, April 12th 2019

While it’s informative understanding the growth rate each year relative to today’s value, it may be more insightful to gauge the rate at which the business is growing on average every year. The benefit of this method is that we can get a bigger picture of the direction of Mortgage Advice Bureau (Holdings)’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 15%. This means, we can assume Mortgage Advice Bureau (Holdings) will grow its earnings by 15% every year for the next couple of years.

Next Steps:

For Mortgage Advice Bureau (Holdings), there are three fundamental aspects 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 MAB1 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 MAB1 is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MAB1? 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.