What Do Analysts Think About NZME Limited's (NZSE:NZM) Future?
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Since NZME Limited (NZSE:NZM) released its earnings in December 2018, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by 0.7% next year against the higher past 5-year average growth rate of 16%. With trailing-twelve-month net income at current levels of NZ$12m, we should see this rise to NZ$12m in 2020. Below is a brief commentary on the longer term outlook the market has for NZME. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for NZME
Exciting times ahead?
Over the next three years, it seems the consensus view of the 3 analysts covering NZM is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of NZM's earnings growth over these next few years.
From the current net income level of NZ$12m and the final forecast of NZ$14m by 2022, the annual rate of growth for NZM’s earnings is 6.4%. This leads to an EPS of NZ$0.072 in the final year of projections relative to the current EPS of NZ$0.060. Margins are currently sitting at 3.0%, which is expected to expand to 3.8% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For NZME, I've put together three essential 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 NZME 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 NZME is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of NZME? 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.
