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Based on TeamLease Services Limited’s (NSE:TEAMLEASE) earnings update on 31 March 2019, analysts seem fairly confident, as upcoming earnings growth is expected to be 35% next year, similar to the range of average earnings growth for the past five years of 35% per year. With trailing-twelve-month net income at current levels of ₹980m, we should see this rise to ₹1.3b in 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for TeamLease Services in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Can we expect TeamLease Services to keep growing?
The longer term expectations from the 12 analysts of TEAMLEASE is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for TEAMLEASE, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 26% based on the most recent earnings level of ₹980m to the final forecast of ₹2.3b by 2022. EPS reaches ₹133.71 in the final year of forecast compared to the current ₹57.34 EPS today. Margins are currently sitting at 2.2%, which is expected to expand to 2.8% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For TeamLease Services, I’ve put together 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 TeamLease Services 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 TeamLease Services is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of TeamLease Services? 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 firstname.lastname@example.org. 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.