Amkor Technology, Inc. (NASDAQ:AMKR): Will The Growth Last?

Since Amkor Technology, Inc. (NASDAQ:AMKR) released its earnings in December 2018, it seems that analyst expectations are fairly bearish, as a -72% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 18%. Currently with trailing-twelve-month earnings of US$127m, we can expect this to reach US$36m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for Amkor Technology

How will Amkor Technology perform in the near future?

The longer term view from the 2 analysts covering AMKR is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of AMKR’s earnings growth over these next few years.

NasdaqGS:AMKR Past and Future Earnings, April 15th 2019
NasdaqGS:AMKR Past and Future Earnings, April 15th 2019

From the current net income level of US$127m and the final forecast of US$183m by 2022, the annual rate of growth for AMKR’s earnings is 12%. This leads to an EPS of $0.75 in the final year of projections relative to the current EPS of $0.53. With a current profit margin of 2.9%, this movement will result in a margin of 4.3% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Amkor Technology, there are three relevant aspects you should look at:

  1. 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.
  2. Valuation: What is Amkor Technology 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 Amkor Technology is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Amkor Technology? 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 editorial-team@simplywallst.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.