There is nothing like increasing the bottom line to excite shareholders and potential investors. Here are three companies that are set to massively increase their earnings per share over the next 12 months.
Kogan.com Ltd (ASX: KGN)
Kogan.com is an online retailer of a wide range of products including computers, phones, televisions, homewares, furniture, bed linen, and sports and leisure products such as camping gear. Kogan sells its own Kogan branded products as well as major brands. The company also sell insurance, travel packages, and phone plans on its website kogan.com.
Kogan last reported earnings per share of 3.6 cents. Analysts have forecast earnings to more than triple to 14 cents per share in 2018 (up over 250%), and to increase 5 times to $0.20 per share in 2019 (up over 400%).
Kogan shares currently trade at $6.93, which puts them at a price to earnings multiple of almost 200x trailing earnings, 50x 2018 earnings, and 35x forecasted earnings for 2019.
Afterpay Touch Group Ltd (ASX: APT)
Afterpay Touch Group is a technology driven payments company that provides a service and software infrastructure which facilitate the purchase of goods and services. The company is comprised of the Afterpay and Touch products.
Afterpay allows retailers to offer a 'buy now, receive now, pay later' service that does not require customers to enter into a traditional loan or pay any upfront fees or interest to Afterpay. Touch is a digital payment business servicing major consumer facing organisations.
Afterpay Touch last reported a loss per share of 1.2 cents in 2017. However, analysts have forecasted earnings to be 7 cents per share in 2018, 18 cents in 2019, and 26 cents in 2020.
At the current share price of $7.69, Afterpay Touch is trading at a price to earnings multiple of 110x 2018 earnings, 43x forecasted 2019 earnings and 30x forecasted 2020 earnings.
Big Un Ltd (ASX: BIG)
Big Un Limited provides video marketing services for small-to-medium businesses. Its products and services range from the production of video content that enable its customers to promote their business through to the delivery and marketing of the video content to consumers via the company's review platform and integrated video review application.
Big Un last reported a loss of 1.2 cents per share. Analysts have forecast earnings of 6 cents per share in 2018, 18 cents in 2019, and 26 cents in 2020.
Big Un shares currently trade at $3.62. This puts the share price at a price to earnings multiple of 60x 2018 earnings, 20x 2019 earnings, and 14x forecasted earnings for 2020.
Foolish takeaway
Earnings growth is a great driver of intrinsic value for shareholders. These three companies offer investors a lot of growth potential. However, beware as a lot of the growth has been factored into current prices, and any slowdown in growth or earnings miss may be detrimental for investors in the short to medium term.
If you take a long-term buy and hold approach, these 3 companies may be worth considering as they each represent leading companies in industries that are of emerging importance.
