How Do Analysts See National CineMedia Inc (NASDAQ:NCMI) Performing Over The Next Few Years?
The latest earnings update National CineMedia Inc’s (NASDAQ:NCMI) released in December 2017 confirmed that the company endured a significant headwind with earnings falling by -87.75%. Today I want to provide a brief commentary on how market analysts view National CineMedia’s earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. Check out our latest analysis for National CineMedia
Analysts’ expectations for the coming year seems buoyant, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally reaching US$31.87M in 2021.
Even though it is informative knowing the rate of growth year by year relative to today’s value, it may be more valuable evaluating the rate at which the business is rising or falling every year, on average. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of National CineMedia’s earnings trajectory over time, 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 48.16%. This means that, we can presume National CineMedia will grow its earnings by 48.16% every year for the next few years.
Next Steps:
For National CineMedia, I’ve put together three essential factors 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 NCMI 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 NCMI is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of NCMI? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
