What Should Investors Know About The Future Of Play Communications S.A.’s (WSE:PLY)?

In December 2018, Play Communications S.A. (WSE:PLY) announced its latest earnings update, which showed that the business benefited from a strong tailwind, leading to a high double-digit earnings growth of 92%. Below, I’ve laid out key growth figures on how market analysts view Play Communications’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for Play Communications

Analysts’ expectations for the coming year seems rather muted, with earnings rising by a single digit 7.2%. The growth outlook in the following year seems much more positive with rates generating double digit 11% compared to today’s earnings, and finally hitting zł847m by 2022.

WSE:PLY Past and Future Earnings, April 8th 2019
WSE:PLY Past and Future Earnings, April 8th 2019

Even though it’s informative knowing the growth rate each year relative to today’s level, it may be more valuable analyzing the rate at which the earnings are growing every year, on average. The advantage of this technique is that it ignores near term flucuations and accounts for the overarching direction of Play Communications’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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 5.0%. This means that, we can anticipate Play Communications will grow its earnings by 5.0% every year for the next few years.

Next Steps:

For Play Communications, I’ve compiled three pertinent factors 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 PLY 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 PLY is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of PLY? 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.