As The Children's Place, Inc. (NASDAQ:PLCE) announced its earnings release on 02 February 2019, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by -12% next year against the higher past 5-year average growth rate of 14%. Currently with trailing-twelve-month earnings of US$101m, we can expect this to reach US$89m by 2020. Below is a brief commentary around Children's Place's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
Exciting times ahead?
Over the next three years, it seems the consensus view of the 6 analysts covering PLCE is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of PLCE's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of US$101m and the final forecast of US$113m by 2022, the annual rate of growth for PLCE’s earnings is 8.5%. EPS reaches $8.05 in the final year of forecast compared to the current $6.1 EPS today. Margins are currently sitting at 5.2%, which is expected to expand to 5.5% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Children's Place, there are 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 Children's Place 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 Children's Place is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Children's Place? 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 firstname.lastname@example.org. 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.