Persistent Systems Limited (NSE:PERSISTENT): What We Can Expect From This Growth Stock
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On 31 March 2019, Persistent Systems Limited (NSE:PERSISTENT) released its earnings update. Generally, the consensus outlook from analysts appear fairly confident, as a 12% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 5.8%. Currently with trailing-twelve-month earnings of ₹3.5b, we can expect this to reach ₹3.9b by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Persistent Systems in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for Persistent Systems
Can we expect Persistent Systems to keep growing?
Longer term expectations from the 24 analysts covering PERSISTENT’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of ₹3.5b and the final forecast of ₹4.9b by 2022, the annual rate of growth for PERSISTENT’s earnings is 11%. EPS reaches ₹63.05 in the final year of forecast compared to the current ₹43.99 EPS today. Margins are currently sitting at 10%, which is expected to expand to 11% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Persistent Systems, I've put together three relevant 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 Persistent Systems 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 Persistent Systems is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Persistent Systems? 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.
