E*TRADE Financial Corporation (NASDAQ:ETFC): Poised For Long Term Success?

After E*TRADE Financial Corporation’s (NASDAQ:ETFC) earnings announcement in December 2017, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 44.69% in the upcoming year against the past 5-year average growth rate of 32.09%. By 2019, we can expect E*TRADE Financial’s bottom line to reach US$852.24M, a jump from the current US$589.00M. Below is a brief commentary around E*TRADE Financial’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here. View our latest analysis for E*TRADE Financial

Exciting times ahead?

The view from 13 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of ETFC’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.
NasdaqGS:ETFC Future Profit Mar 12th 18
NasdaqGS:ETFC Future Profit Mar 12th 18
By 2021, ETFC’s earnings should reach US$1.05B, from current levels of US$589.00M, resulting in an annual growth rate of 14.46%. EPS reaches $4.19 in the final year of forecast compared to the current $2.16 EPS today. The main reason for growth is a result of cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 23.24%, this movement will result in a margin of 33.74% by 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For E*TRADE Financial, there are three pertinent aspects 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 E*TRADE Financial 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 E*TRADE Financial is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of E*TRADE Financial? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!