Agree Realty Corporation (NYSE:ADC): Immense Growth Potential?
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Agree Realty Corporation’s (NYSE:ADC) most recent earnings update in December 2018 suggested that the business gained from a slight tailwind, eventuating to a single-digit earnings growth of 0.1%. Below, I’ve presented key growth figures on how market analysts perceive Agree Realty’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for Agree Realty
Analysts’ expectations for next year seems buoyant, with earnings expanding by a robust 14%. This growth seems to continue into the following year with rates reaching double digit 30% compared to today’s earnings, and finally hitting US$85m by 2022.
Even though it’s helpful to understand the growth each year relative to today’s level, it may be more beneficial to analyze the rate at which the company is rising or falling every year, on average. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of Agree Realty’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve appended 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 that, we can presume Agree Realty will grow its earnings by 11% every year for the next few years.
Next Steps:
For Agree Realty, I’ve put together 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 ADC 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 ADC is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ADC? 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 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.
