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In December 2018, NetDragon Websoft Holdings Limited (HKG:777) released its most recent earnings announcement, which indicated that the company turned profitable again after experiencing negative earnings in the last financial year. Below, I've presented key growth figures on how market analysts perceive NetDragon Websoft Holdings's earnings growth outlook over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Check out our latest analysis for NetDragon Websoft Holdings
Analysts' expectations for the coming year seems buoyant, with earnings climbing by a robust 29%. This growth seems to continue into the following year with rates arriving at double digit 60% compared to today’s earnings, and finally hitting CN¥1.1b by 2022.
While it’s helpful to understand the growth rate year by year relative to today’s figure, it may be more valuable gauging the rate at which the earnings are rising or falling every year, on average. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of NetDragon Websoft Holdings's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've appended 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 22%. This means, we can anticipate NetDragon Websoft Holdings will grow its earnings by 22% every year for the next few years.
Next Steps:
For NetDragon Websoft Holdings, I've compiled three pertinent aspects you should further research:
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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.
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Valuation: What is 777 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 777 is currently mispriced by the market.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 777? 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.