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As Herman Miller, Inc. (NASDAQ:MLHR) released its earnings announcement on 02 March 2019, analysts seem fairly confident, with earnings growth rate expected to be 23% in the upcoming year, relative to the past five-year average earnings growth of 24% per year. Presently, with latest-twelve-month earnings at US$128m, we should see this growing to US$158m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Herman Miller in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Exciting times ahead?
Over the next three years, it seems the consensus view of the 3 analysts covering MLHR is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of MLHR’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.
From the current net income level of US$128m and the final forecast of US$191m by 2022, the annual rate of growth for MLHR’s earnings is 10%. EPS reaches $3.69 in the final year of forecast compared to the current $2.15 EPS today. With a current profit margin of 5.4%, this movement will result in a margin of 7.2% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Herman Miller, there are 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 Herman Miller 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 Herman Miller is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Herman Miller? 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.