In December 2018, UOL Group Limited (SGX:U14) announced its most recent earnings update, which revealed that the business experienced a major headwind with earnings deteriorating by -51%. Below, I’ve laid out key growth figures on how market analysts perceive UOL Group’s earnings growth outlook over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Market analysts’ prospects for the upcoming year seems pessimistic, with earnings decreasing by a double-digit -14%. In the following year, earnings begin to improve, but face another fall in 2022 with earnings arriving at S$404m.
Although it’s informative knowing the growth year by year relative to today’s level, it may be more insightful analyzing the rate at which the earnings are rising or falling every year, on average. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of UOL Group’s earnings trajectory over time, fluctuate up and down. To calculate this rate, I’ve appended 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 -1.4%. This means, we can anticipate UOL Group will chip away at a rate of -1.4% every year for the next few years.
For UOL Group, I’ve compiled three important factors you should look at:
- 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.
- Valuation: What is U14 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 U14 is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of U14? 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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If you spot an error that warrants correction, please contact the editor at email@example.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.