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In December 2018, Sunningdale Tech Ltd (SGX:BHQ) announced its most recent earnings update, which revealed that the company endured a slight headwind with earnings falling from S$31m to S$30m, a change of -5.1%. Below, I've laid out key growth figures on how market analysts predict Sunningdale Tech's earnings growth trajectory 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.
Check out our latest analysis for Sunningdale Tech
Analysts' expectations for the upcoming year seems pessimistic, with earnings declining by a double-digit -25%. In the next couple of years, earnings are expected to continue to be below today's level, with a decline of -20% in 2021, eventually reaching S$24m in 2022.
Although it’s helpful to be aware of the growth year by year relative to today’s figure, it may be more beneficial evaluating the rate at which the earnings are rising or falling every year, on average. The pro of this approach is that we can get a better picture of the direction of Sunningdale Tech's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put 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 -4.7%. This means that, we can assume Sunningdale Tech will chip away at a rate of -4.7% every year for the next few years.
Next Steps:
For Sunningdale Tech, I've put together three relevant aspects you should further research:
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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 BHQ 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 BHQ 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 BHQ? 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.