Yahoo Finance BJ's Restaurants, Inc. (NASDAQ:BJRI): Are Analysts Right About The Drop In Earnings?
After BJ's Restaurants, Inc.'s (NASDAQ:BJRI) recent earnings announcement in January 2019, analyst consensus outlook seem pessimistic, with profits predicted to drop by -8.6% next year relative to the past 5-year average growth rate of 18%. With trailing-twelve-month net income at current levels of US$51m, the consensus growth rate suggests that earnings will decline to US$46m 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.
See our latest analysis for BJ's Restaurants
How will BJ's Restaurants perform in the near future?
The 14 analysts covering BJRI view its longer term outlook with a positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of BJRI's earnings growth over these next few years.
From the current net income level of US$51m and the final forecast of US$50m by 2022, the annual rate of growth for BJRI’s earnings is 1.2%. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of $2.42 in the final year of forecast compared to the current $2.42 EPS today. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 4.5% to 3.7% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For BJ's Restaurants, there are three key factors you should look at:
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 BJ's Restaurants 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 BJ's Restaurants is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of BJ's Restaurants? 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.
