Based on PerkinElmer, Inc.’s (NYSE:PKI) earnings update on 30 December 2018, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 37% next year against the past 5-year average growth rate of 1.0%. Presently, with latest-twelve-month earnings at US$237m, we should see this growing to US$324m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for PerkinElmer in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect PerkinElmer to keep growing?
Longer term expectations from the 11 analysts covering PKI’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for PKI, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 22% based on the most recent earnings level of US$237m to the final forecast of US$471m by 2022. EPS reaches $4.15 in the final year of forecast compared to the current $2.15 EPS today. In 2022, PKI’s profit margin will have expanded from 8.5% to 14%.
Future outlook is only one aspect when you’re building an investment case for a stock. For PerkinElmer, I’ve compiled three pertinent 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 PerkinElmer 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 PerkinElmer is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of PerkinElmer? 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.