What Should We Expect From Yirendai Ltd’s (NYSE:YRD) Earnings Over The Next Few Years?

In December 2017, Yirendai Ltd (NYSE:YRD) released its latest earnings announcement, which confirmed that the company gained from a robust tailwind, leading to a double-digit earnings growth of 22.88%. Below, I’ve laid out key numbers on how market analysts view Yirendai’s earnings growth trajectory over the next few 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. See our latest analysis for Yirendai

Analysts’ outlook for the upcoming year seems buoyant, with earnings expanding by a robust 23.72%. This growth seems to continue into the following year with rates reaching double digit 59.87% compared to today’s earnings, and finally hitting CN¥2.46B by 2021.

NYSE:YRD Future Profit Apr 13th 18
NYSE:YRD Future Profit Apr 13th 18

While it’s useful to be aware of the growth rate each year relative to today’s value, it may be more insightful evaluating the rate at which the company is growing every year, on average. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of Yirendai’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted 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 19.62%. This means that, we can anticipate Yirendai will grow its earnings by 19.62% every year for the next couple of years.

Next Steps:

For Yirendai, I’ve put together three important aspects you should further research:

  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 YRD 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 YRD is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of YRD? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!