APAC Realty Limited (SGX:CLN): Immense Growth Potential?

The most recent earnings update APAC Realty Limited's (SGX:CLN) released in December 2017 signalled that the business experienced a strong tailwind, eventuating to a high double-digit earnings growth of 63.10%. Below is a brief commentary on my key takeaways on how market analysts view APAC Realty's earnings growth outlook 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. View our latest analysis for APAC Realty

Market analysts' consensus outlook for this coming year seems positive, with earnings growing by a robust 14.47%. This growth seems to continue into the following year with rates reaching double digit 20.11% compared to today’s earnings, and finally hitting S$31.40M by 2021.

Although it is helpful to understand the growth rate year by year relative to today’s value, it may be more insightful to gauge the rate at which the earnings are moving on average every year. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of APAC Realty's earnings trajectory over time, which may be more relevant for long term investors. To compute 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 6.71%. This means, we can presume APAC Realty will grow its earnings by 6.71% every year for the next couple of years.

Next Steps:

For APAC Realty, there are three relevant 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 CLN 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 CLN is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CLN? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.