Premier Asset Management Group Plc’s (AIM:PAM) latest earnings announcement in September 2017 confirmed that the company gained from a major tailwind, more than doubling its earnings from the prior year. Below is my commentary, albeit very simple and high-level, on how market analysts predict Premier Asset Management Group’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. 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 Premier Asset Management Group
Analysts’ expectations for this coming year seems optimistic, with earnings rising by a significant 68.99%. This strong growth in earnings is expected to continue, bringing the bottom line up to £24.1M by 2020.
While it is useful to understand the growth each year relative to today’s level, it may be more insightful to gauge the rate at which the earnings are moving on average every year. The advantage of this approach is that we can get a bigger picture of the direction of Premier Asset Management 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 29.66%. This means that, we can anticipate Premier Asset Management Group will grow its earnings by 29.66% every year for the next couple of years.
Next Steps:
For Premier Asset Management Group, I’ve put together three important factors 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 PAM 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 PAM is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of PAM? 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.