Yahoo Finance What Can We Expect From Viacom Inc’s (NASDAQ:VIAB) Earnings Over The Next Year?
Looking at Viacom Inc’s (NASDAQ:VIAB) earnings update in June 2018, analyst forecasts appear to be bearish, with earnings expected to decline by -12% in the upcoming year. However, this pessimism is not unsubstantiated given the 5-year track record of negative growth. Currently with a railing-twelve-month profit of US$2.0b, the consensus growth rate suggests that earnings will drop to US$1.7b by 2019. Below is a brief commentary on the longer term outlook the market has for Viacom. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
View our latest analysis for Viacom
Can we expect Viacom to keep growing?
The longer term view from the 27 analysts covering VIAB is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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 VIAB’s earnings growth over these next few years.
This results in an annual growth rate of 1.6% based on the most recent earnings level of US$1.9b to the final forecast of US$1.7b by 2021. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of $4.32 in the final year of forecast compared to the current $4.68 EPS today. The bottom-line growth seems to be caused by revenue expansion of 2.2% exceeeding cost growth over time. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 14% to 12% by the end of 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Viacom, there are three fundamental 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 Viacom 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 Viacom is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Viacom? 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.
