Market analysts’ consensus outlook for the coming year seems optimistic, with earnings expanding by a significant 97.94%. This strong growth in earnings is expected to continue, bringing the bottom line up to ₹63.54b by 2021.
Even though it’s informative knowing the growth each year relative to today’s value, it may be more insightful estimating the rate at which the business is growing every year, on average. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of Sun Pharmaceutical Industries’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve inserted 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 35.19%. This means that, we can assume Sun Pharmaceutical Industries will grow its earnings by 35.19% every year for the next couple of years.
For Sun Pharmaceutical Industries, I’ve compiled three key factors you should further examine:
- 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 SUNPHARMA 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 SUNPHARMA is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SUNPHARMA? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!