Will Herman Miller, Inc.’s (NASDAQ:MLHR) Earnings Grow Over The Next Few Years?

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In June 2019, Herman Miller, Inc. (NASDAQ:MLHR) announced its most recent earnings update, which confirmed that the business experienced a robust tailwind, eventuating to a double-digit earnings growth of 25%. Below, I’ve laid out key growth figures on how market analysts view Herman Miller’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for Herman Miller

Analysts’ expectations for the coming year seems positive, with earnings expanding by a robust 21%. This growth seems to continue into the following year with rates reaching double digit 31% compared to today’s earnings, and finally hitting US$225m by 2022.

NasdaqGS:MLHR Past and Future Earnings, July 19th 2019
NasdaqGS:MLHR Past and Future Earnings, July 19th 2019

While it’s useful to be aware of the growth rate year by year relative to today’s level, it may be more valuable to analyze the rate at which the business is moving every year, on average. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Herman Miller’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 8.0%. This means, we can presume Herman Miller will grow its earnings by 8.0% every year for the next couple of years.

Next Steps:

For Herman Miller, there are three key factors you should further examine:

  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 MLHR 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 MLHR is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MLHR? 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 editorial-team@simplywallst.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.