In March 2019, Intellect Design Arena Limited (NSE:INTELLECT) announced its latest earnings update, which confirmed that the business gained from a significant tailwind, more than doubling its earnings from the prior year. Below, I've laid out key growth figures on how market analysts view Intellect Design Arena's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

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Check out our latest analysis for Intellect Design Arena

Analysts' outlook for the coming year seems rather subdued, with earnings rising by a single digit 9.9%. The growth outlook in the following year seems much more optimistic with rates arriving at double digit 53% compared to today’s earnings, and finally hitting ₹2.7b by 2022.

Although it’s useful to understand the rate of growth year by year relative to today’s level, it may be more beneficial to determine the rate at which the company is growing every year, on average. The pro of this technique is that we can get a better picture of the direction of Intellect Design Arena's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I've appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 23%. This means, we can expect Intellect Design Arena will grow its earnings by 23% every year for the next couple of years.

Next Steps:

For Intellect Design Arena, there are three important factors 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 INTELLECT 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 INTELLECT is currently mispriced by the market.

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