How Do Analysts See Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH) Performing Over The Next Few Years?

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Fisher & Paykel Healthcare Corporation Limited’s (NZSE:FPH) latest earnings announcement in March 2019 signalled that the company gained from a slight tailwind, leading to a single-digit earnings growth of 10.0%. Below is a brief commentary on my key takeaways on how market analysts predict Fisher & Paykel Healthcare’s earnings growth trajectory 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.

See our latest analysis for Fisher & Paykel Healthcare

Market analysts’ prospects for the coming year seems optimistic, with earnings expanding by a robust 17%. This growth seems to continue into the following year with rates reaching double digit 35% compared to today’s earnings, and finally hitting NZ$326m by 2022.

NZSE:FPH Past and Future Earnings, June 4th 2019
NZSE:FPH Past and Future Earnings, June 4th 2019

Although it’s helpful to be aware of the growth rate each year relative to today’s value, it may be more beneficial evaluating the rate at which the business is growing every year, on average. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Fisher & Paykel Healthcare’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 13%. This means, we can presume Fisher & Paykel Healthcare will grow its earnings by 13% every year for the next few years.

Next Steps:

For Fisher & Paykel Healthcare, I’ve put together three relevant aspects you should look at:

  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 FPH 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 FPH is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of FPH? 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.