The latest earnings release Southern Cross Media Group Limited’s (ASX:SXL) announced in June 2017 signalled that the company gained from a strong tailwind, leading to a double-digit earnings growth of 40.55%. Below, I’ve laid out key growth figures on how market analysts perceive Southern Cross Media Group’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View our latest analysis for Southern Cross Media Group
Market analysts’ prospects for next year seems pessimistic, with earnings declining by a double-digit -17.94%. In the next couple of years, earnings are predicted to continue to be below today’s level, with a decline of -12.89% in 2019, eventually reaching A$94.6M in 2020.
Although it’s useful to understand the rate of growth each year relative to today’s level, it may be more valuable to estimate the rate at which the company is growing on average every year. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Southern Cross Media Group’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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -2.40%. This means that, we can expect Southern Cross Media Group will chip away at a rate of -2.40% every year for the next couple of years.
Next Steps:
For Southern Cross Media Group, I’ve compiled three pertinent factors you should further examine:
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 SXL 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 SXL is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SXL? 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.