Diurnal Group plc's (LON:DNL) most recent earnings announcement in June 2018 revealed company earnings became less negative compared to the previous year's level as a result of recent tailwinds Below is my commentary, albeit very simple and high-level, on how market analysts predict Diurnal Group'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.
See our latest analysis for Diurnal Group
Market analysts' consensus outlook for next year seems relatively subdued, with earnings continuing to flop around in the negative territory, reaching -UK£14m in 2019. Additionally, earnings should fall further in the following year, decreasing to -UK£12m in 2020 and -UK£1m in 2021.
While it’s useful to be aware of the growth rate each year relative to today’s level, it may be more beneficial analyzing the rate at which the company is growing on average every year. The pro of this technique is that we can get a better picture of the direction of Diurnal 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've appended 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 38%. This means that, we can expect Diurnal Group will grow its earnings by 38% every year for the next few years.
Next Steps:
For Diurnal Group, I've put together three pertinent aspects you should further research:
- 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.
- Future Earnings: How does DNL's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of DNL? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.