What Should You Know About Luye Pharma Group Ltd.'s (HKG:2186) Earnings Trajectory?
Luye Pharma Group Ltd.'s (HKG:2186) latest earnings update in December 2018 suggested that the company experienced a strong tailwind, leading to a double-digit earnings growth of 33%. Below, I've laid out key numbers on how market analysts predict Luye Pharma Group's earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Luye Pharma Group
Analysts' expectations for the upcoming year seems positive, with earnings growing by a robust 20%. This growth seems to continue into the following year with rates reaching double digit 42% compared to today’s earnings, and finally hitting CN¥2.0b by 2022.
While it’s informative knowing the growth rate each year relative to today’s value, it may be more insightful to evaluate the rate at which the earnings are rising or falling every year, on average. The advantage of this method is that it ignores near term flucuations and accounts for the overarching direction of Luye Pharma Group's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've inserted 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 14%. This means that, we can presume Luye Pharma Group will grow its earnings by 14% every year for the next few years.
Next Steps:
For Luye Pharma Group, I've put together three relevant aspects 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 2186 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 2186 is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 2186? 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.
