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As Echo Global Logistics, Inc. (NASDAQ:ECHO) released its latest earnings announcement on 31 December 2018, it seems that analyst forecasts are fairly bearish, with earnings expected to decline by -3.5% in the upcoming year against the past 5-year average growth rate of 9.7%. With trailing-twelve-month net income at current levels of US$29m, the consensus growth rate suggests that earnings will decline to US$28m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Exciting times ahead?
The longer term expectations from the 10 analysts of ECHO is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 8.8% based on the most recent earnings level of US$29m to the final forecast of US$40m by 2022. EPS reaches $1.52 in the final year of forecast compared to the current $1.04 EPS today. In 2022, ECHO’s profit margin will have expanded from 1.2% to 1.4%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Echo Global Logistics, I’ve put together three fundamental 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 Echo Global Logistics 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 Echo Global Logistics is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Echo Global Logistics? 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 email@example.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.