Market analysts’ consensus outlook for this coming year seems pessimistic, with earnings falling by a double-digit -67.17%. Beyond this, earnings are predicted to continue to be below today’s level, with a decline of -59.64% in 2020, eventually reaching US$90.36M in 2021.
Although it’s helpful to understand the growth each year relative to today’s value, it may be more valuable to evaluate the rate at which the business is moving on average every year. The pro of this method is that we can get a bigger picture of the direction of Hostess Brands’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is -27.57%. This means that, we can presume Hostess Brands will chip away at a rate of -27.57% every year for the next couple of years.
For Hostess Brands, I’ve compiled three fundamental aspects you should further research:
- 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 TWNK 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 TWNK is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of TWNK? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!