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What Should We Expect From American Campus Communities, Inc.'s (NYSE:ACC) Earnings In The Next Couple Of Years?

Simply Wall St

American Campus Communities, Inc.'s (NYSE:ACC) latest earnings announcement in December 2018 revealed that the business benefited from a strong tailwind, eventuating to a high double-digit earnings growth of 71%. Below is a brief commentary on my key takeaways on how market analysts view American Campus Communities's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

View our latest analysis for American Campus Communities

Market analysts' prospects for this coming year seems pessimistic, with earnings declining by a double-digit -26%. Over the medium term, earnings will begin to improve, expanding year on year, and reaching US$137m by 2022.

NYSE:ACC Past and Future Earnings, April 10th 2019

While it is informative understanding the growth each year relative to today’s figure, it may be more beneficial to gauge the rate at which the earnings are growing on average every year. The benefit of this technique is that we can get a bigger picture of the direction of American Campus Communities's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've appended 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 1.8%. This means, we can anticipate American Campus Communities will grow its earnings by 1.8% every year for the next couple of years.

Next Steps:

For American Campus Communities, I've compiled three relevant 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 ACC 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 ACC is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ACC? 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.