What Should Investors Know About Dart Group PLC's (LON:DTG) Future?
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On 31 March 2019, Dart Group PLC (LON:DTG) released its most recent earnings update. Generally, analyst consensus outlook seem bearish, with earnings expected to decline by 12% in the upcoming year against the past 5-year average growth rate of 30%. Presently, with latest-twelve-month earnings at UK£146m, we should see this fall to UK£128m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Check out our latest analysis for Dart Group
What can we expect from Dart Group in the longer term?
The longer term view from the 3 analysts covering DTG is one of negative 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 DTG's earnings growth over these next few years.
This results in an annual growth rate of -0.9% based on the most recent earnings level of UK£146m to the final forecast of UK£141m by 2022. This leads to an EPS of £0.95 in the final year of projections relative to the current EPS of £0.98. The bottom-line decline seems to be caused by top-line expansion of 9.5%, which is predicted to lag cost growth leading up to 2022. Furthermore, the current 4.6% margin is expected to contract to 3.4% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Dart Group, I've put together three fundamental aspects you should further examine:
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 Dart 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 Dart Group is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Dart 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.
