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After Ultra Electronics Holdings plc's (LON:ULE) earnings announcement on 31 December 2018, analysts seem extremely confident, with earnings expected to more than double in the upcoming year, compared with the past 5-year average growth rate of 12%. By 2020, we can expect Ultra Electronics Holdings’s bottom line to reach UK£70m, a jump from the current trailing-twelve-month of UK£32m. Below is a brief commentary on the longer term outlook the market has for Ultra Electronics Holdings. For those interested in more of an analysis of the company, you can research its fundamentals here.
Check out our latest analysis for Ultra Electronics Holdings
How is Ultra Electronics Holdings going to perform in the near future?
Longer term expectations from the 9 analysts covering ULE’s stock 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 ULE'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.
By 2022, ULE's earnings should reach UK£78m, from current levels of UK£32m, resulting in an annual growth rate of 24%. EPS reaches £0.91 in the final year of forecast compared to the current £0.44 EPS today. Margins are currently sitting at 4.2%, which is expected to expand to 9.3% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Ultra Electronics Holdings, there are three relevant factors you should look at:
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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 Ultra 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 Ultra Electronics Holdings 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 Ultra 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.