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After IGG Inc’s (HKG:799) earnings announcement in December 2018, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 0.3% next year relative to the higher past 5-year average growth rate of 38%. By 2020, we can expect IGG’s bottom line to reach US$190m, a jump from the current trailing-twelve-month of US$189m. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for IGG in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Exciting times ahead?
Longer term expectations from the 14 analysts covering 799’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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 799’s earnings growth over these next few years.
This results in an annual growth rate of 7.2% based on the most recent earnings level of US$189m to the final forecast of US$230m by 2022. This leads to an EPS of $0.17 in the final year of projections relative to the current EPS of $0.15. Margins are currently sitting at 25%, approximately the same as previous years. With analysts forecasting revenue growth of 0.21497 and 799’s net income growth expected to roughly track that, this company may add value for shareholders over time.
Future outlook is only one aspect when you’re building an investment case for a stock. For IGG, there are three pertinent factors 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.
- Valuation: What is IGG 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 IGG is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of IGG? 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 email@example.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.