After RISE Education Cayman Ltd's (NASDAQ:REDU) earnings announcement on 31 December 2018, the consensus outlook from analysts appear fairly confident, as upcoming earnings growth is expected to be 28% next year, similar to the range of average earnings growth for the past five years of 29% per year. Currently with trailing-twelve-month earnings of CN¥143m, we can expect this to reach CN¥183m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for RISE Education Cayman

How is RISE Education Cayman going to perform in the near future?

The 3 analysts covering REDU view its longer term outlook with a positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for REDU, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

From the current net income level of CN¥143m and the final forecast of CN¥293m by 2022, the annual rate of growth for REDU’s earnings is 24%. EPS reaches CN¥4.84 in the final year of forecast compared to the current CN¥2.51 EPS today. In 2022, REDU's profit margin will have expanded from 11% to 13%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For RISE Education Cayman, I've compiled three key aspects you should further research:

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 RISE Education Cayman 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 RISE Education Cayman is currently mispriced by the market.

3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of RISE Education Cayman? 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.