As Van Elle Holdings plc (LON:VANL) announced its recent earnings release on 30 April 2019, analyst consensus outlook seem pessimistic, with earnings expected to decline by 13% in the upcoming year compared with the past 5-year average growth rate of 1.6%. Presently, with latest-twelve-month earnings at UK£3.2m, we should see this fall to UK£2.8m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
How will Van Elle Holdings perform in the near future?
The view from 2 analysts over the next three years 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 VANL’s earnings growth over these next few years.
This results in an annual growth rate of 13% based on the most recent earnings level of UK£3.2m to the final forecast of UK£4.5m by 2022. This leads to an EPS of £0.057 in the final year of projections relative to the current EPS of £0.040. With a current profit margin of 3.6%, this movement will result in a margin of 4.9% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Van Elle Holdings, I’ve put together three fundamental factors you should further examine:
- 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 Van Elle Holdings 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 Van Elle Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Van Elle Holdings? 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 firstname.lastname@example.org. 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.