Based on Logitech International S.A.'s (VTX:LOGN) earnings update in March 2019, it seems that analyst expectations are fairly bearish, as a 13% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 17%. Presently, with latest-twelve-month earnings at US$258m, we should see this growing to US$290m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
What can we expect from Logitech International in the longer term?
The view from 13 analysts over the next three years is one of 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 LOGN'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.
This results in an annual growth rate of 13% based on the most recent earnings level of US$258m to the final forecast of US$364m by 2022. EPS reaches $2 in the final year of forecast compared to the current $1.56 EPS today. With a current profit margin of 9.2%, this movement will result in a margin of 11% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Logitech International, there are three pertinent aspects you should further research:
- 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 Logitech International 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 Logitech International is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Logitech International? 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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