Yahoo Finance What Should We Expect From CGI Group Inc’s (TSE:GIB.A) Earnings In The Next Couple Of Years?
The most recent earnings update CGI Group Inc’s (TSE:GIB.A) released in September 2018 revealed that the business gained from a robust tailwind, eventuating to a double-digit earnings growth of 10%. Below, I’ve laid out key growth figures on how market analysts perceive CGI Group’s earnings growth outlook 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 CGI Group
Market analysts’ prospects for this coming year seems buoyant, with earnings rising by a robust 15%. This growth seems to continue into the following year with rates arriving at double digit 22% compared to today’s earnings, and finally hitting CA$1.5b by 2021.
Although it’s helpful to be aware of the rate of growth year by year relative to today’s value, it may be more insightful to evaluate the rate at which the company is moving every year, on average. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of CGI Group’s earnings trajectory over time, which may be more relevant for long term investors. To compute 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 9.0%. This means, we can expect CGI Group will grow its earnings by 9.0% every year for the next couple of years.
Next Steps:
For CGI Group, I’ve put together three essential aspects you should further research:
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.
Valuation: What is GIB.A 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 GIB.A is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of GIB.A? 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.
