As Sabre Corporation (NASDAQ:SABR) announced its recent earnings release on 30 June 2019, analyst consensus outlook appear bearish, as a 17% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 13%. Currently with a trailing-twelve-month profit of US$336m, the consensus growth rate suggests that earnings will drop to US$279m by 2020. Below is a brief commentary around Sabre’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Exciting times ahead?
The view from 10 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of SABR’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.
This results in an annual growth rate of 25% based on the most recent earnings level of US$336m to the final forecast of US$500m by 2022. EPS reaches $1.29 in the final year of forecast compared to the current $1.22 EPS today. With a current profit margin of 8.7%, this movement will result in a margin of 11% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Sabre, I’ve compiled 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 Sabre 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 Sabre is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Sabre? 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.