What Should We Expect From Steadfast Group Limited's (ASX:SDF) Earnings In The Year Ahead?

Simply Wall St

On 30 June 2019, Steadfast Group Limited (ASX:SDF) released its earnings update. Generally, analyst forecasts seem fairly subdued, with profits predicted to rise by 3.9% next year compared with the higher past 5-year average growth rate of 19%. Presently, with latest-twelve-month earnings at AU$104m, we should see this growing to AU$108m by 2020. Below is a brief commentary around Steadfast Group's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

See our latest analysis for Steadfast Group

What can we expect from Steadfast Group in the longer term?

Longer term expectations from the 5 analysts covering SDF’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

ASX:SDF Past and Future Earnings, August 22nd 2019

By 2022, SDF's earnings should reach AU$125m, from current levels of AU$104m, resulting in an annual growth rate of 6.5%. EPS reaches A$0.15 in the final year of forecast compared to the current A$0.13 EPS today. Margins are currently sitting at 14%, which is expected to expand to 16% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Steadfast Group, I've put together three key aspects 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 Steadfast Group 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 Steadfast Group is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Steadfast Group? 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.