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Aaron's, Inc. (NYSE:AAN): What Does The Future Look Like?

Simply Wall St

In March 2019, Aaron's, Inc. (NYSE:AAN) released its earnings update. Generally, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 21% in the upcoming year, though this is evidently lower than the past 5-year average earnings growth of 24%. Currently with trailing-twelve-month earnings of US$196m, we can expect this to reach US$237m by 2020. Below is a brief commentary around Aaron's's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for Aaron's

Can we expect Aaron's to keep growing?

Longer term expectations from the 8 analysts covering AAN’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for AAN, 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.

NYSE:AAN Past and Future Earnings, July 24th 2019

By 2022, AAN's earnings should reach US$327m, from current levels of US$196m, resulting in an annual growth rate of 13%. EPS reaches $5.05 in the final year of forecast compared to the current $2.84 EPS today. With a current profit margin of 5.1%, this movement will result in a margin of 7.5% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Aaron's, there are three pertinent aspects you should further research:

  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 Aaron's 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 Aaron's is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Aaron's? 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.