Essent Group Ltd (ESNT): Will The Growth Last?
Based on the latest analyst predictions, Essent Group Ltd (NYSE:ESNT) is estimated to sizably grow its earnings by 31.55% in the upcoming three years. Presently, with an EPS of $2.865, we can expect an upcoming EPS of $3.769. To determine whether this growth rate expectation is justified, we should take a look at how the company has been performing in the past. Check out our latest analysis for Essent Group
Exciting times ahead for ESNT
Analyst expectation from the stock’s 9 analysts is one of positive sentiment, with earnings estimated to expand from current levels of $2.865 to $3.769 over the next couple of years. This indicates a relatively solid earnings per share growth rate of 31.55% over the next few years, which is an optimistic outlook in the near term. During the same time and net income is predicted to slightly grow from $261M to $343M in the next couple of years, growing by 31.55%. Though, at the current levels of revenue and profit, margins are certainly underwhelming.
Is the growth built on solid basis?
The past can be a helpful indicator for future performance for a stock. We can determine whether this level of expected growth is sustainable and whether the company continues to go from strength to strength. ESNT’s triple-digit earnings growth the past couple of years indicates that the company’s past performance is quite revealing of future outcome. This means ESNT has already proven its capacity to grow at a robust rate, which should give investors higher conviction of analysts’ consensus prediction for the company’s future growth going forward.
Next Steps:
For ESNT, there are three fundamental aspects you should look at:
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 ESNT 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 ESNT is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ESNT? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
