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In December 2018, Boyd Gaming Corporation (NYSE:BYD) released its latest earnings announcement, which suggested that the company endured a major headwind with earnings falling by -32%. Today I want to provide a brief commentary on how market analysts predict Boyd Gaming's earnings growth trajectory over the next few years and whether the future looks brighter. 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.
Analysts' expectations for this coming year seems buoyant, with earnings increasing by a significant 60%. This high growth in earnings is expected to continue, bringing the bottom line up to US$237m by 2022.
While it is informative understanding the rate of growth year by year relative to today’s value, it may be more beneficial analyzing the rate at which the business is growing every year, on average. The benefit of this approach is that we can get a bigger picture of the direction of Boyd Gaming'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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 24%. This means that, we can anticipate Boyd Gaming will grow its earnings by 24% every year for the next couple of years.
For Boyd Gaming, there are three essential aspects you should look at:
- 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 BYD 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 BYD is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BYD? 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 firstname.lastname@example.org. 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.