Tribal Group plc (LON:TRB): What Are The Future Prospects?

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Looking at Tribal Group plc’s (LON:TRB) earnings update in December 2018, analysts seem cautiously optimistic, as a 33% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 16%. Presently, with latest-twelve-month earnings at UK£4.1m, we should see this growing to UK£5.5m by 2020. Below is a brief commentary around Tribal Group’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for Tribal Group

What can we expect from Tribal Group in the longer term?

Over the next three years, it seems the consensus view of the 2 analysts covering TRB is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around 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 TRB’s earnings growth over these next few years.

AIM:TRB Past and Future Earnings, July 20th 2019
AIM:TRB Past and Future Earnings, July 20th 2019

This results in an annual growth rate of 17% based on the most recent earnings level of UK£4.1m to the final forecast of UK£7.2m by 2022. EPS reaches £0.035 in the final year of forecast compared to the current £0.021 EPS today. In 2022, TRB’s profit margin will have expanded from 5.2% to 8.2%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Tribal Group, I’ve put together three pertinent 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 Tribal Group 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 Tribal Group is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Tribal Group? 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.