What Do Analysts Think About Kainos Group plc's (LON:KNOS) Future?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In May 2019, Kainos Group plc (LON:KNOS) released its latest earnings announcement, which confirmed that the business gained from a strong tailwind, leading to a double-digit earnings growth of 45%. Today I want to provide a brief commentary on how market analysts perceive Kainos Group'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 Kainos Group
Market analysts' consensus outlook for the coming year seems positive, with earnings climbing by a robust 11%. This growth seems to continue into the following year with rates reaching double digit 27% compared to today’s earnings, and finally hitting UK£24m by 2022.
While it’s informative knowing the rate of growth each year relative to today’s level, it may be more insightful estimating the rate at which the earnings are rising or falling every year, on average. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Kainos Group'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 11%. This means, we can expect Kainos Group will grow its earnings by 11% every year for the next couple of years.
Next Steps:
For Kainos Group, I've compiled three fundamental aspects 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 KNOS 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 KNOS is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of KNOS? 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.
