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As AMC Networks Inc. (NASDAQ:AMCX) announced its earnings release on 31 March 2019, it seems that analyst expectations are fairly bearish, with profits predicted to rise by 7.8% next year relative to the higher past 5-year average growth rate of 13%. By 2020, we can expect AMC Networks’s bottom line to reach US$481m, a jump from the current trailing-twelve-month of US$446m. Below is a brief commentary around AMC Networks'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 AMC Networks to keep growing?
Longer term expectations from the 18 analysts covering AMCX’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly 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.
By 2022, AMCX's earnings should reach US$478m, from current levels of US$446m, resulting in an annual growth rate of 1.4%. EPS reaches $9.27 in the final year of forecast compared to the current $7.68 EPS today. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 15% to 15% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For AMC Networks, I've put together three important aspects 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 AMC Networks 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 AMC Networks is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of AMC Networks? 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.