Yahoo Finance What Should We Expect From Sprouts Farmers Market, Inc.’s (NASDAQ:SFM) Earnings Over The Next Few Years?
The latest earnings update Sprouts Farmers Market, Inc. (NASDAQ:SFM) released in December 2018 showed that the company gained from a small tailwind, eventuating to a single-digit earnings growth of 0.06%. Investors may find it useful to understand how market analysts perceive Sprouts Farmers Market’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Sprouts Farmers Market
Analysts’ outlook for the coming year seems pessimistic, with earnings declining by -5.0%. But in the following year, there is a complete contrast in performance, with arriving at double digit 0.7% compared to today’s level and continues to increase to US$162m in 2022.
Although it is helpful to be aware of the growth year by year relative to today’s figure, it may be more valuable to estimate the rate at which the earnings are moving every year, on average. The benefit of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Sprouts Farmers Market’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 1.9%. This means that, we can expect Sprouts Farmers Market will grow its earnings by 1.9% every year for the next couple of years.
Next Steps:
For Sprouts Farmers Market, I’ve put together three fundamental 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 SFM 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 SFM is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SFM? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.
