Looking at Intrepid Potash, Inc.’s (NYSE:IPI) earnings update on 31 December 2018, the consensus outlook from analysts appear highly confident, as earnings are expected to increase by more than twofold next year, against the previous 5-year average growth rate of -0.9%. Presently, with latest-twelve-month earnings at US$12m, we should see this growing to US$25m by 2020. Below is a brief commentary on the longer term outlook the market has for Intrepid Potash. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Exciting times ahead?
Over the next three years, it seems the consensus view of the 4 analysts covering IPI is skewed towards the 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 IPI’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.
By 2022, IPI’s earnings should reach US$26m, from current levels of US$12m, resulting in an annual growth rate of 26%. EPS reaches $0.20 in the final year of forecast compared to the current $0.092 EPS today. With a current profit margin of 7.3%, this movement will result in a margin of 13% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Intrepid Potash, I’ve compiled three key factors 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 Intrepid Potash 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 Intrepid Potash is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Intrepid Potash? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.