What Should You Know About EBOS Group Limited’s (NZSE:EBO) Future?

Looking at EBOS Group Limited’s (NZSE:EBO) earnings update in December 2018, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 9.4% in the upcoming year relative to the higher past 5-year average growth rate of 13%. Presently, with latest-twelve-month earnings at AU$137m, we should see this growing to AU$150m by 2020. Below is a brief commentary on the longer term outlook the market has for EBOS Group. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for EBOS Group

How will EBOS Group perform in the near future?

The longer term view from the 6 analysts covering EBO is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of EBO’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NZSE:EBO Past and Future Earnings, April 19th 2019
NZSE:EBO Past and Future Earnings, April 19th 2019

From the current net income level of AU$137m and the final forecast of AU$183m by 2022, the annual rate of growth for EBO’s earnings is 10%. EPS reaches A$1.19 in the final year of forecast compared to the current A$0.90 EPS today. In 2022, EBO’s profit margin will have expanded from 2.0% to 2.1%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For EBOS Group, I’ve put together three essential 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 EBOS 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 EBOS Group is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of EBOS 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 editorial-team@simplywallst.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.