Since TD Ameritrade Holding Corporation (NASDAQ:AMTD) released its earnings in March 2019, it seems that analyst expectations are fairly bearish, as a 6.0% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 17%. With trailing-twelve-month net income at current levels of US$1.5b, we should see this rise to US$1.6b in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Exciting times ahead?
Over the next three years, it seems the consensus view of the 14 analysts covering AMTD is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of AMTD's earnings growth over these next few years.
From the current net income level of US$1.5b and the final forecast of US$1.7b by 2022, the annual rate of growth for AMTD’s earnings is 3.9%. This leads to an EPS of $4.55 in the final year of projections relative to the current EPS of $2.6. With a current profit margin of 28%, this movement will result in a margin of 28% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For TD Ameritrade Holding, I've put together three relevant 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 TD Ameritrade Holding 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 TD Ameritrade Holding is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of TD Ameritrade Holding? 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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