After ZAGG Inc’s (NASDAQ:ZAGG) earnings announcement on 31 December 2018, analyst consensus outlook appear cautiously subdued, as a 13% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 24%. Presently, with latest-twelve-month earnings at US$39m, we should see this growing to US$44m by 2020. Below is a brief commentary on the longer term outlook the market has for ZAGG. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How is ZAGG going to perform in the near future?
Longer term expectations from the 5 analysts covering ZAGG’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of ZAGG’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 6.0% based on the most recent earnings level of US$39m to the final forecast of US$49m by 2022. This leads to an EPS of $1.61 in the final year of projections relative to the current EPS of $1.4. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 7.3% to 7.0% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For ZAGG, I’ve put together 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 ZAGG 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 ZAGG is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ZAGG? 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.