In March 2019, AusNet Services Ltd (ASX:AST) released its earnings update. Generally, it seems that analyst expectations are fairly bearish, as a 4.3% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 11%. With trailing-twelve-month net income at current levels of AU$254m, we should see this rise to AU$265m in 2020. Below is a brief commentary on the longer term outlook the market has for AusNet Services. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

View our latest analysis for AusNet Services

What can we expect from AusNet Services in the longer term?

The view from 9 analysts over the next three years 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 get an idea of the overall earnings growth trend for AST, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

From the current net income level of AU$254m and the final forecast of AU$286m by 2022, the annual rate of growth for AST’s earnings is 4.1%. This leads to an EPS of A$0.078 in the final year of projections relative to the current EPS of A$0.070. Margins are currently sitting at 14%, which is expected to expand to 14% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For AusNet Services, there are three key aspects you should further research:

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 AusNet Services 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 AusNet Services is currently mispriced by the market.

3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of AusNet Services? 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.