Yahoo Finance What Can We Expect From Floor & Decor Holdings Inc’s (NYSE:FND) Earnings Over The Next Year?
After Floor & Decor Holdings Inc’s (NYSE:FND) recent earnings announcement in June 2018, analyst forecasts appear to be bearish, with profits predicted to drop by -15.4% next year against the past 5-year average growth rate of 50.2%. With trailing-twelve-month net income at current levels of US$142.9m, the consensus growth rate suggests that earnings will decline to US$121.0m by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Floor & Decor Holdings in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Check out our latest analysis for Floor & Decor Holdings
How is Floor & Decor Holdings going to perform in the near future?
The 16 analysts covering FND view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of FND’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of US$102.8m and the final forecast of US$131.5m by 2021, the annual rate of growth for FND’s earnings is 17.3%. EPS reaches $1.68 in the final year of forecast compared to the current $1.13 EPS today. Growth in earnings appears to be a result of top-line expansion of 18.5%, dropping down to the bottome-line. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 7.4% to 5.3% by the end of 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Floor & Decor Holdings, there are three relevant factors 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 Floor & Decor Holdings 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 Floor & Decor Holdings is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Floor & Decor Holdings? 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.