Analysts covering Dean Foods Company (NYSE:DF) are predicting single-digit earnings per share contraction of -5.38% over the following three years. Presently, with an EPS of $0.617, we can expect an upcoming EPS of $0.584. I am going to look at the latest data on DF to assess whether this adverse expected growth is reasonable. View our latest analysis for Dean Foods
How is DF going to perform in the future?There are dark clouds over Dean Foods’s potential over the next couple of years. Analysts are predicting the earnings to slide down to $0.584 in the three year’s time from previous levels of around $0.617. This would be a decline of -5.38%, so it will be an interesting ride. In the same period we should see the revenue decline from $7,905M to $7,510M and profit is predicted to reduce slightly from $56M to $53M in the next couple of years. Furthermore, margins look rather unappealing at the current levels of revenue and earnings.
Is this similar growth to the past?The past can be a great indicator for future performance for a stock. We can determine whether this level of expected growth is relatively justified or whether the negative sentiment is too pessimistic. DF’s earnings growth is expected to exhibit negative momentum as analysts expect the triple-digit earnings growth in the previous couple of years to move into negative territory. As a small-cap company, DF could be in the stage of growth and high investment, meaning expenses will exceed revenues, leading to a negative growth period.
For DF, I’ve compiled three pertinent factors you should further research:
1. 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.
2. Valuation: What is DF 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 DF is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of DF? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!