Based on the latest analyst predictions, Potbelly Corporation (NASDAQ:PBPB) is estimated to significantly grow its earnings by 221.78% in the upcoming three years. At a current EPS of $0.171, this growth rate means shareholders can expect an impending EPS of $0.55. I am going to look at the latest data on PBPB to assess whether this expected growth is reasonable. Check out our latest analysis for Potbelly
What can we expect from Potbelly Corporation (NASDAQ:PBPB) in the future?One reason why investors are attracted to PBPB is the high growth potential in the near future. Expectations from 6 analysts are extremely bullish with earnings per share estimated to more than double over the next couple of years. In the same period revenue is predicted to increase from $416M to $492M and profits (net income) are predicted to catapult from $4M to $14M in the next couple of years, more than doubling from the most recent level. Though, at the current levels of revenue and profit, margins are certainly underwhelming.
Is the growth built on solid basis?The past can be a helpful indicator for future performance for a stock. We can determine whether this level of expected growth is highly excessive or whether the company has consistently exhibited strength. PBPB’s triple-digit earnings growth the past couple of years indicates that the company’s past performance is quite revealing of future outcome. This means PBPB has already proven its capacity to grow at an elevated rate, which should give investors higher conviction of analysts’ consensus prediction for the company’s future growth going forward.
For PBPB, there are three fundamental aspects 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 PBPB 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 PBPB is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of PBPB? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!