What Can We Expect From Kiwi Property Group Limited’s (NZSE:KPG) Earnings In The Year Ahead?

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On 31 March 2019, Kiwi Property Group Limited (NZSE:KPG) announced its latest earnings update. Overall, analyst forecasts appear to be bearish, as a 18% fall in profits is expected in the upcoming year against the past 5-year average growth rate of 3.9%. Currently with a trailing-twelve-month profit of NZ$138m, the consensus growth rate suggests that earnings will drop to NZ$113m by 2020. Below is a brief commentary around Kiwi Property Group’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.

View our latest analysis for Kiwi Property Group

What can we expect from Kiwi Property Group in the longer term?

Longer term expectations from the 7 analysts covering KPG’s stock is one of negative sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of KPG’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:KPG Past and Future Earnings, June 15th 2019
NZSE:KPG Past and Future Earnings, June 15th 2019

By 2022, KPG’s earnings should reach NZ$137m, from current levels of NZ$138m, resulting in an annual growth rate of -0.6%. This leads to an EPS of NZ$0.089 in the final year of projections relative to the current EPS of NZ$0.097. The main reason for KPG’s earnings contraction is a falling top-line, with negative growth of -3.7%. However, the current margin of 58% is expected to expand to 66% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Kiwi Property Group, I’ve put together three essential aspects you should further research:

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