Walker Greenbank PLC (LON:WGB): Immense Growth Potential?

Walker Greenbank PLC’s (LON:WGB) latest earnings update in January 2019 suggested that the company faced a major headwind with earnings declining by -57%. Below, I’ve presented key growth figures on how market analysts perceive Walker Greenbank’s earnings growth outlook over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for Walker Greenbank

Market analysts’ consensus outlook for next year seems rather subdued, with earnings growing by a single digit 1.9%. However, the following year seems to show a contrast, with earnings declining by -3.9%. This volatility continues into the final year of forecast, with earnings arriving at UK£5.9m.

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

Although it’s useful to understand the growth each year relative to today’s figure, it may be more insightful evaluating the rate at which the earnings are growing on average every year. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Walker Greenbank’s earnings trajectory over time, fluctuate up and down. To compute 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 2.7%. This means that, we can assume Walker Greenbank will grow its earnings by 2.7% every year for the next couple of years.

Next Steps:

For Walker Greenbank, I’ve put together three relevant factors you should look at:

  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 WGB 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 WGB is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of WGB? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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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.