What Should You Know About Automotive Holdings Group Limited’s (ASX:AHG) Growth?
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Automotive Holdings Group Limited’s (ASX:AHG) announced its latest earnings update in June 2018, which indicated that the business experienced a substantial headwind with earnings declining by -41%. Below, I’ve laid out key growth figures on how market analysts predict Automotive Holdings Group’s earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for Automotive Holdings Group
Market analysts’ consensus outlook for this coming year seems optimistic, with earnings climbing by a significant 69%. This high growth in earnings is expected to continue, bringing the bottom line up to AU$71m by 2022.
Although it’s informative knowing the growth year by year relative to today’s figure, it may be more insightful estimating the rate at which the business is growing on average every year. The advantage of this approach is that it ignores near term flucuations and accounts for the overarching direction of Automotive Holdings Group’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 23%. This means that, we can anticipate Automotive Holdings Group will grow its earnings by 23% every year for the next few years.
Next Steps:
For Automotive Holdings Group, I’ve put together three fundamental factors you should further research:
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 AHG 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 AHG is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AHG? 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.
