Based on Abano Healthcare Group Limited’s (NZSE:ABA) earnings update on 31 May 2019, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 29% next year compared with the past 5-year average growth rate of 11%. By 2020, we can expect Abano Healthcare Group’s bottom line to reach NZ$9.8m, a jump from the current trailing-twelve-month of NZ$7.6m. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from Abano Healthcare Group in the longer term?
Longer term expectations from the 2 analysts covering ABA’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, ABA’s earnings should reach NZ$12m, from current levels of NZ$7.6m, resulting in an annual growth rate of 10%. This leads to an EPS of NZ$0.42 in the final year of projections relative to the current EPS of NZ$0.29. With a current profit margin of 2.7%, this movement will result in a margin of 4.1% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Abano Healthcare Group, I’ve put together three fundamental 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.
- Valuation: What is Abano Healthcare Group 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 Abano Healthcare Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Abano Healthcare Group? 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.