The most recent earnings update Enova International, Inc.’s (NYSE:ENVA) released in December 2018 revealed that the business gained from a major tailwind, more than doubling its earnings from the prior year. Below, I’ve laid out key numbers on how market analysts perceive Enova International’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts’ outlook for the upcoming year seems positive, with earnings climbing by a robust 43%. This growth seems to continue into the following year with rates reaching double digit 65% compared to today’s earnings, and finally hitting US$134m by 2022.
While it is informative understanding the rate of growth year by year relative to today’s level, it may be more valuable analyzing the rate at which the earnings are moving every year, on average. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Enova International’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 21%. This means that, we can expect Enova International will grow its earnings by 21% every year for the next few years.
For Enova International, there are three important aspects 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 ENVA 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 ENVA is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ENVA? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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