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On 30 December 2018, SiteOne Landscape Supply, Inc. (NYSE:SITE) released its earnings update. Generally, analyst forecasts seem fairly subdued, with profits predicted to rise by 8.3% next year relative to the higher past 5-year average growth rate of 42%. Currently with trailing-twelve-month earnings of US$74m, we can expect this to reach US$80m by 2020. Below is a brief commentary around SiteOne Landscape Supply’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Can we expect SiteOne Landscape Supply to keep growing?
Longer term expectations from the 7 analysts covering SITE’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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 SITE’s earnings growth over these next few years.
From the current net income level of US$74m and the final forecast of US$143m by 2022, the annual rate of growth for SITE’s earnings is 20%. This leads to an EPS of $3.27 in the final year of projections relative to the current EPS of $1.83. With a current profit margin of 3.5%, this movement will result in a margin of 5.0% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For SiteOne Landscape Supply, I’ve put together three key 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 SiteOne Landscape Supply 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 SiteOne Landscape Supply is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SiteOne Landscape Supply? 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 firstname.lastname@example.org. 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.