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What Do Analysts Think About The Future Of PGT Innovations, Inc.'s (NYSE:PGTI)?

Simply Wall St

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In December 2018, PGT Innovations, Inc. (NYSE:PGTI) announced its earnings update. Overall, the consensus outlook from analysts appear somewhat bearish, as a 9.1% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 23%. Currently with trailing-twelve-month earnings of US$54m, we can expect this to reach US$59m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

View our latest analysis for Innovations

Can we expect Innovations to keep growing?

Over the next three years, it seems the consensus view of the 9 analysts covering PGTI is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for PGTI, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NYSE:PGTI Past and Future Earnings, May 3rd 2019
NYSE:PGTI Past and Future Earnings, May 3rd 2019

From the current net income level of US$54m and the final forecast of US$82m by 2022, the annual rate of growth for PGTI’s earnings is 13%. EPS reaches $1.41 in the final year of forecast compared to the current $1.03 EPS today. In 2022, PGTI's profit margin will have expanded from 7.7% to 9.5%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Innovations, I've put together three fundamental aspects you should further research:

  1. 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.

  2. Valuation: What is Innovations 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 Innovations is currently mispriced by the market.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Innovations? 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 editorial-team@simplywallst.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.