Produce Investments PLC (AIM:PIL) is predicted to grow its earnings per share by a massive 186.23% over the next three years. At a current EPS of £0.1, shareholders can expect next year’s EPS to be around £0.22. To assess the reasonability of PIL’s earnings growth per share, we should look at its most recent growth rate delivered. Check out our latest analysis for Produce Investments
How is Produce Investments going to perform in the future?
If you are bullish about Produce Investments’s growth potential then you are certainly not alone. Analyst expectation is very high, with earnings expected to rise from todays level of £0.1 to £0.27 over the next 3 years. This implies a range of around 174% to 186%.
This will project the annual earnings to levels above what has been seen in the past few years.
During the same time we will see the revenue grow from £185 Million to £211 Million in 2019 and profit is predicted to shoot from £2 Million to £7 Million in 2019, roughly growing 3x. Margins look rather unappealing at the current levels of revenue and earnings.
Is this similar growth to the past?
The past can be a helpful indicator for future performance. We can determine whether this level of expected growth is sustainable and whether the company continues to go from strength to strength. PIL’s earnings growth in the last five years was a unexciting1.56%, indicating a relatively more upbeat attitude towards the company in the upcoming year.This belief may be supported by turnaround initiatives or previous investments coming to fruition.
On the whole, PIL looks like it is well-placed to continue delivering buoyant growth in the upcoming years, supported by analysts’ optimistic growth projections. However, in order to determine whether this bullish sentiment is yet to be accounted for by the market, we also need to see if it is undervalued. As Warren Buffett’s right-hand man Charlie Munger said, “No matter how wonderful a business is, it’s not worth an infinite price“. Is PIL an undervalued gem? Let’s find out in this free analysis report. If you are not interested in PIL anymore, you can use our free platform to see my list of over 150 other stocks with a high growth potential.
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