Based on Abano Healthcare Group Limited's (NZSE:ABA) earnings update in November 2018, analyst consensus outlook appear cautiously subdued, as a 9.1% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 23%. Currently with trailing-twelve-month earnings of NZ$10m, we can expect this to reach NZ$11m by 2020. Below is a brief commentary around Abano Healthcare Group's earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for Abano Healthcare Group

How is Abano Healthcare Group going to perform in the near future?

The view from 2 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for ABA, 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.

This results in an annual growth rate of 12% based on the most recent earnings level of NZ$10m to the final forecast of NZ$14m by 2022. This leads to an EPS of NZ$0.54 in the final year of projections relative to the current EPS of NZ$0.42. In 2022, ABA's profit margin will have expanded from 4.1% to 5.3%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Abano Healthcare Group, I've put together three essential aspects you should further examine:

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 Abano Healthcare 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 Abano Healthcare Group is currently mispriced by the market.

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