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After E*TRADE Financial Corporation's (NASDAQ:ETFC) earnings announcement in March 2019, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 0.6% in the upcoming year against the higher past 5-year average growth rate of 31%. With trailing-twelve-month net income at current levels of US$1.0b, we should see this rise to US$1.0b in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
What can we expect from E*TRADE Financial in the longer term?
The longer term expectations from the 12 analysts of ETFC is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 5.0% based on the most recent earnings level of US$1.0b to the final forecast of US$1.1b by 2022. This leads to an EPS of $4.91 in the final year of projections relative to the current EPS of $3.9. Margins are currently sitting at 34%, which is expected to expand to 35% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For E*TRADE Financial, I've put together three fundamental aspects you should further examine:
- 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 E*TRADE Financial 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 E*TRADE Financial is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of E*TRADE Financial? 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 email@example.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.