The most recent earnings release Seritage Growth Properties’s (NYSE:SRG) announced in December 2018 suggested that losses became smaller relative to the prior year’s level as a result of recent tailwinds Below, I’ve laid out key growth figures on how market analysts predict Seritage Growth Properties’s earnings growth trajectory over the next couple of years and whether the future looks brighter. 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.
Market analysts’ consensus outlook for this coming year seems relatively unexciting, with earnings continuing to flop around in the negative territory, generating -US$79.1m in 2020. Additionally, earnings are expected to fall further in the following year, falling to -US$71.6m in 2021 and -US$55.5m in 2022.
Although it is useful to understand the growth each year relative to today’s figure, it may be more beneficial to evaluate the rate at which the company is moving every year, on average. The advantage of this approach is that we can get a better picture of the direction of Seritage Growth Properties’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 inserted 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 11%. This means, we can anticipate Seritage Growth Properties will grow its earnings by 11% every year for the next few years.
For Seritage Growth Properties, there are three relevant 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 SRG 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 SRG is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SRG? 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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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.