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The latest earnings release StarHub Ltd's (SGX:CC3) announced in December 2018 showed that the company endured a significant headwind with earnings falling by -28%. Below, I've presented key growth figures on how market analysts perceive StarHub's earnings growth outlook over the next couple of 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.
See our latest analysis for StarHub
Analysts' outlook for the upcoming year seems pessimistic, with earnings decreasing by -0.4%. In the next couple of years, earnings are predicted to continue to be below today's level, with a decrease of -11% in 2021, eventually reaching S$173m in 2022.
Although it is informative knowing the growth each year relative to today’s value, it may be more beneficial to gauge the rate at which the company is rising or falling on average every year. The advantage of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of StarHub's earnings trajectory over time, be more volatile. To compute 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 -4.4%. This means that, we can expect StarHub will chip away at a rate of -4.4% every year for the next couple of years.
Next Steps:
For StarHub, I've put together 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 CC3 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 CC3 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 CC3? 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.