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In April 2019, Zensar Technologies Limited (NSE:ZENSARTECH) announced its most recent earnings update, which indicated that the company benefited from a robust tailwind, eventuating to a double-digit earnings growth of 30%. Below, I've presented key growth figures on how market analysts perceive Zensar Technologies's earnings growth trajectory over the next couple of 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 Zensar Technologies
Market analysts' prospects for this coming year seems optimistic, with earnings climbing by a robust 19%. This growth seems to continue into the following year with rates reaching double digit 42% compared to today’s earnings, and finally hitting ₹5.1b by 2022.
Although it is useful to understand the growth year by year relative to today’s figure, it may be more valuable evaluating the rate at which the earnings are moving on average every year. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Zensar Technologies's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've inserted 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 16%. This means, we can expect Zensar Technologies will grow its earnings by 16% every year for the next couple of years.
Next Steps:
For Zensar Technologies, there are three relevant factors you should further examine:
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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 ZENSARTECH 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 ZENSARTECH 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 ZENSARTECH? 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.