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Based on HNI Corporation’s (NYSE:HNI) earnings update on 30 March 2019, it seems that analyst forecasts are fairly optimistic, as a 32% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 4.5%. By 2020, we can expect HNI’s bottom line to reach US$123m, a jump from the current trailing-twelve-month of US$93m. Below is a brief commentary on the longer term outlook the market has for HNI. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Can we expect HNI to keep growing?
The longer term view from the 3 analysts covering HNI 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 reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 9.4% based on the most recent earnings level of US$93m to the final forecast of US$144m by 2022. EPS reaches $3.22 in the final year of forecast compared to the current $2.14 EPS today. Margins are currently sitting at 4.1%, which is expected to expand to 5.8% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For HNI, I’ve compiled three essential aspects 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 HNI 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 HNI is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of HNI? 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 firstname.lastname@example.org. 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.