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Based on SeaLink Travel Group Limited’s (ASX:SLK) earnings update in June 2018, analysts seem fairly confident, with earnings expected to grow by 42% in the upcoming year against the past 5-year average growth rate of 29%. Currently with trailing-twelve-month earnings of AU$20m, we can expect this to reach AU$28m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for SeaLink Travel Group in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for SeaLink Travel Group
What can we expect from SeaLink Travel Group in the longer term?
The view from 4 analysts over the next three years 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 understand the overall trajectory of SLK’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 AU$20m and the final forecast of AU$35m by 2022, the annual rate of growth for SLK’s earnings is 17%. This leads to an EPS of A$0.34 in the final year of projections relative to the current EPS of A$0.19. In 2022, SLK’s profit margin will have expanded from 9.4% to 12%.
Future outlook is only one aspect when you’re building an investment case for a stock. For SeaLink Travel Group, there are three key 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 SeaLink Travel Group 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 SeaLink Travel Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SeaLink Travel Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.