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In December 2018, Party City Holdco Inc. (NYSE:PRTY) announced its earnings update. Overall, the consensus outlook from analysts appear fairly confident, as a 20% increase in profits is expected in the upcoming year, though this is comparatively lower than the historical 5-year average earnings growth of 45%. Presently, with latest-twelve-month earnings at US$123m, we should see this growing to US$148m by 2020. Below is a brief commentary on the longer term outlook the market has for Party City Holdco. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
What can we expect from Party City Holdco in the longer term?
The longer term expectations from the 8 analysts of PRTY is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 13% based on the most recent earnings level of US$123m to the final forecast of US$183m by 2022. This leads to an EPS of $1.92 in the final year of projections relative to the current EPS of $1.28. Margins are currently sitting at 5.1%, which is expected to expand to 6.9% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Party City Holdco, I've compiled three relevant 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 Party City Holdco 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 Party City Holdco is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Party City Holdco? 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.