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In December 2018, Hilton Grand Vacations Inc. (NYSE:HGV) released its latest earnings announcement, which showed that the company faced a slight headwind with earnings declining from US$327m to US$298m, a change of -8.9%. Below, I've laid out key growth figures on how market analysts view Hilton Grand Vacations's earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Market analysts' prospects for this coming year seems pessimistic, with earnings declining by -9.7%. But in the following year, there is a complete contrast in performance, with generating double digit 0.01% compared to today’s level and continues to increase to US$317m in 2022.
While it is informative understanding the rate of growth year by year relative to today’s value, it may be more valuable determining the rate at which the business is moving on average every year. The pro of this method is that we can get a bigger picture of the direction of Hilton Grand Vacations's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've appended 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 0.8%. This means, we can assume Hilton Grand Vacations will grow its earnings by 0.8% every year for the next couple of years.
For Hilton Grand Vacations, I've put together three relevant aspects you should further examine:
- 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 HGV 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 HGV is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of HGV? 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.