What Should Investors Know About Ryanair Holdings plc's (ISE:RY4C) Growth?

The most recent earnings release Ryanair Holdings plc's (ISE:RY4C) announced in March 2018 confirmed that the company benefited from a robust tailwind, eventuating to a double-digit earnings growth of 10.21%. Investors may find it useful to understand how market analysts predict Ryanair Holdings's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for Ryanair Holdings

Analysts' outlook for the coming year seems pessimistic, with earnings declining by -8.28%. Over the medium term, earnings should continue to be below today's level, with a decline of -1.69% in 2020, eventually reaching €1.43b in 2021.

Even though it’s informative understanding the growth each year relative to today’s figure, it may be more valuable to evaluate the rate at which the business is growing every year, on average. The benefit of this technique is that we can get a better picture of the direction of Ryanair Holdings's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've inserted 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 1.97%. This means, we can anticipate Ryanair Holdings will grow its earnings by 1.97% every year for the next couple of years.

Next Steps:

For Ryanair Holdings, there are three pertinent factors 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 RY4C 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 RY4C is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of RY4C? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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.