Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
On 31 December 2018, Enova International, Inc. (NYSE:ENVA) announced its earnings update. Overall, it seems that analyst forecasts are fairly optimistic, as a 45% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of -20%. With trailing-twelve-month net income at current levels of US$70m, we should see this rise to US$102m in 2020. Below is a brief commentary around Enova International’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
How will Enova International perform in the near future?
The longer term expectations from the 4 analysts of ENVA is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of ENVA’s earnings growth over these next few years.
From the current net income level of US$70m and the final forecast of US$134m by 2022, the annual rate of growth for ENVA’s earnings is 22%. EPS reaches $3.88 in the final year of forecast compared to the current $2.06 EPS today. With a current profit margin of 6.8%, this movement will result in a margin of 7.8% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Enova International, I’ve put together three important 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 Enova International 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 Enova International is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Enova International? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.