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What Do Analysts Think About Ichor Holdings, Ltd.'s (NASDAQ:ICHR) Growth?

Simply Wall St

After Ichor Holdings, Ltd.'s (NASDAQ:ICHR) recent earnings announcement in December 2018, analyst consensus outlook appear bearish, with earnings expected to decline by -61% in the upcoming year compared with the past 5-year average growth rate of 67%. With trailing-twelve-month net income at current levels of US$58m, the consensus growth rate suggests that earnings will decline to US$23m by 2020. Below is a brief commentary around Ichor Holdings's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for Ichor Holdings

What can we expect from Ichor Holdings in the longer term?

Over the next three years, it seems the consensus view of the 7 analysts covering ICHR is skewed towards the negative sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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 ICHR's earnings growth over these next few years.

NasdaqGS:ICHR Past and Future Earnings, April 10th 2019

From the current net income level of US$58m and the final forecast of US$53m by 2022, the annual rate of growth for ICHR’s earnings is -4.2%. EPS reaches $2.3 in the final year of forecast compared to the current $2.34 EPS today. The bottom-line decline seems to be caused by cost growth exceeding top-line growth of 4.1% in the next three years. With this high cost growth, margins is expected to contract from 7.0% to 6.4% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Ichor Holdings, I've compiled three essential factors you should further examine:

  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 Ichor Holdings 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 Ichor Holdings is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Ichor Holdings? 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.