In December 2018, TD Ameritrade Holding Corporation (NASDAQ:AMTD) announced its earnings update. Overall, the consensus outlook from analysts appear fairly confident, as a 23% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 13%. Currently with trailing-twelve-month earnings of US$1.5b, we can expect this to reach US$1.8b by 2020. Below is a brief commentary on the longer term outlook the market has for TD Ameritrade Holding. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
How will TD Ameritrade Holding perform in the near future?
The longer term view from the 16 analysts covering AMTD is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for AMTD, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$1.5b and the final forecast of US$2.2b by 2022, the annual rate of growth for AMTD’s earnings is 11%. This leads to an EPS of $5.09 in the final year of projections relative to the current EPS of $2.6. Margins are currently sitting at 28%, which is expected to expand to 34% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For TD Ameritrade Holding, I’ve put together three essential factors 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 TD Ameritrade Holding 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 TD Ameritrade Holding is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of TD Ameritrade Holding? 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.