The latest earnings announcement Credit Corp Group Limited (ASX:CCP) released in June 2018 revealed that the business gained from a robust tailwind, eventuating to a double-digit earnings growth of 17%. Below, I’ve laid out key numbers on how market analysts view Credit Corp Group’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Credit Corp Group

Market analysts’ prospects for the coming year seems rather subdued, with earnings climbing by a single digit 7.3%. The growth outlook in the following year seems much more buoyant with rates reaching double digit 22% compared to today’s earnings, and finally hitting AU$86m by 2021.

Although it’s informative understanding the growth rate year by year relative to today’s level, it may be more insightful to estimate the rate at which the business is rising or falling on average every year. The advantage of this method is that we can get a better picture of the direction of Credit Corp 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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 9.8%. This means that, we can anticipate Credit Corp Group will grow its earnings by 9.8% every year for the next few years.

Next Steps:

For Credit Corp Group, there are three key factors you should look at:

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 CCP 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 CCP is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CCP? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.