Arbor Realty Trust, Inc.’s (NYSE:ABR) latest earnings announcement in December 2018 confirmed that the company benefited from a strong tailwind, leading to a high double-digit earnings growth of 65%. Below is my commentary, albeit very simple and high-level, on how market analysts view Arbor Realty Trust’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Analysts’ outlook for next year seems rather subdued, with earnings rising by a single digit 0.8%. The following year doesn’t look much more exciting, though earnings does reach US$136m in 2022.
Although it’s helpful to be aware of the growth each year relative to today’s figure, it may be more insightful gauging the rate at which the business is growing on average every year. The advantage of this approach is that we can get a better picture of the direction of Arbor Realty Trust’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 5.3%. This means that, we can anticipate Arbor Realty Trust will grow its earnings by 5.3% every year for the next couple of years.
For Arbor Realty Trust, I’ve compiled three relevant 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 ABR 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 ABR is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ABR? 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.