The most recent earnings update J.B. Hunt Transport Services, Inc.’s (NASDAQ:JBHT) released in December 2018 suggested that the company experienced a substantial headwind with earnings declining by -29%. Below, I’ve laid out key growth figures on how market analysts predict J.B. Hunt Transport Services’s earnings growth trajectory over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Market analysts’ consensus outlook for the upcoming year seems optimistic, with earnings expanding by a robust 40%. This growth seems to continue into the following year with rates reaching double digit 51% compared to today’s earnings, and finally hitting US$794m by 2022.
Although it’s informative understanding the growth rate year by year relative to today’s figure, it may be more insightful to estimate the rate at which the earnings are rising or falling every year, on average. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of J.B. Hunt Transport Services’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 10%. This means that, we can presume J.B. Hunt Transport Services will grow its earnings by 10% every year for the next few years.
For J.B. Hunt Transport Services, I’ve compiled three fundamental aspects 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 JBHT 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 JBHT is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of JBHT? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.