Spire Healthcare Group Plc (LON:SPI): What Does The Future Look Like?

Spire Healthcare Group Plc’s (LON:SPI) announced its latest earnings update in December 2017, which revealed that the business endured a major headwind with earnings deteriorating by -68.66%. Below, I’ve laid out key growth figures on how market analysts view Spire Healthcare Group’s earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for Spire Healthcare Group

Analysts’ expectations for next year seems buoyant, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally reaching UK£70.32m in 2021.

LSE:SPI Future Profit June 12th 18
LSE:SPI Future Profit June 12th 18

Although it is useful to understand the rate of growth year by year relative to today’s value, it may be more beneficial analyzing the rate at which the business is growing on average every year. The advantage of this method is that we can get a better picture of the direction of Spire Healthcare Group’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 24.60%. This means that, we can assume Spire Healthcare Group will grow its earnings by 24.60% every year for the next couple of years.

Next Steps:

For Spire Healthcare Group, I’ve put together three essential 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 SPI 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 SPI is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SPI? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!