Based on Floor & Decor Holdings, Inc.’s (NYSE:FND) earnings update in December 2018, analysts seem cautiously bearish, with earnings expected to grow by -4.3% in the upcoming year compared with the higher past 5-year average growth rate of 45%. By 2020, we can expect Floor & Decor Holdings’s bottom line to reach US$111m, a jump from the current trailing-twelve-month of US$116m. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How is Floor & Decor Holdings going to perform in the near future?
The longer term view from the 18 analysts covering FND 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 understand the overall trajectory of FND’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, FND’s earnings should reach US$174m, from current levels of US$116m, resulting in an annual growth rate of 15%. This leads to an EPS of $1.67 in the final year of projections relative to the current EPS of $1.2. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 6.8% to 5.8% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Floor & Decor Holdings, there are three important 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 Floor & Decor Holdings 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 Floor & Decor Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Floor & Decor Holdings? 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.