Galaxy Entertainment Group Limited’s (SEHK:27) released its most recent earnings update in June 2017, which revealed that the business experienced a large tailwind, leading to a high double-digit earnings growth of 51.01%. Below, I’ve presented key growth figures on how market analysts view Galaxy Entertainment Group’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for Galaxy Entertainment Group
Analysts’ outlook for the upcoming year seems positive, with earnings expanding by a robust 24.87%. This growth seems to continue into the following year with rates reaching double digit 36.70% compared to today’s earnings, and finally hitting HK$12,697.2M by 2020.
Although it’s informative knowing the growth rate year by year relative to today’s value, it may be more insightful determining the rate at which the business is moving every year, on average. The advantage of this technique is that we can get a better picture of the direction of Galaxy Entertainment Group’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 9.97%. This means that, we can anticipate Galaxy Entertainment Group will grow its earnings by 9.97% every year for the next couple of years.
Next Steps:
For Galaxy Entertainment Group, I’ve put together three fundamental aspects you should further research:
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 27 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 27 is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of 27? 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 pass 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.