TCL Electronics Holdings Limited (HKG:1070): What We Can Expect From This Growth Stock
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Since TCL Electronics Holdings Limited (HKG:1070) released its earnings in December 2018, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 11% in the upcoming year against the higher past 5-year average growth rate of 62%. With trailing-twelve-month net income at current levels of HK$944m, we should see this rise to HK$1.0b in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Check out our latest analysis for TCL Electronics Holdings
How will TCL Electronics Holdings perform in the near future?
Longer term expectations from the 4 analysts covering 1070’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of 1070's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of HK$944m and the final forecast of HK$1.4b by 2022, the annual rate of growth for 1070’s earnings is 12%. EPS reaches HK$0.58 in the final year of forecast compared to the current HK$0.43 EPS today. With a current profit margin of 2.1%, this movement will result in a margin of 2.2% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For TCL Electronics Holdings, there are three relevant factors you should look at:
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 TCL Electronics Holdings 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 TCL Electronics Holdings is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of TCL Electronics Holdings? 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.
