What Should We Expect From Quality Systems Inc’s (NASDAQ:QSII) Earnings Over The Next Few Years?

In March 2018, Quality Systems Inc (NASDAQ:QSII) announced its most recent earnings update, which revealed that the business faced a major headwind with earnings deteriorating by -86.73%. Today I want to provide a brief commentary on how market analysts view Quality Systems’s earnings growth trajectory over the next couple of years and whether the future looks brighter. 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 out our latest analysis for Quality Systems

Market analysts’ consensus outlook for next year seems buoyant, with earnings growth more than doubling. Earnings seem to continue strongly in the following year, finally arriving at US$17.62m in 2021.

NasdaqGS:QSII Future Profit June 12th 18
NasdaqGS:QSII Future Profit June 12th 18

Even though it’s informative knowing the rate of growth year by year relative to today’s level, it may be more beneficial analyzing the rate at which the company is growing every year, on average. The advantage of this approach is that we can get a better picture of the direction of Quality Systems’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. 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 42.12%. This means, we can anticipate Quality Systems will grow its earnings by 42.12% every year for the next few years.

Next Steps:

For Quality Systems, I’ve compiled three important factors 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 QSII 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 QSII is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of QSII? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!