Eagle Bancorp, Inc.'s (NASDAQ:EGBN) most recent earnings announcement in December 2018 confirmed that the company experienced a strong tailwind, eventuating to a high double-digit earnings growth of 52%. Below, I've presented key growth figures on how market analysts view Eagle Bancorp's earnings growth trajectory over the next couple of 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.
Analysts' outlook for the upcoming year seems rather subdued, with earnings expanding by a single digit 6.2%. The growth outlook in the following year seems much more optimistic with rates generating double digit 15% compared to today’s earnings, and finally hitting US$178m by 2022.
Even though it is informative knowing the rate of growth each year relative to today’s figure, it may be more insightful evaluating the rate at which the earnings are rising or falling on average every year. The pro of this technique is that we can get a bigger picture of the direction of Eagle Bancorp'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 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 5.8%. This means, we can anticipate Eagle Bancorp will grow its earnings by 5.8% every year for the next few years.
For Eagle Bancorp, there are three fundamental factors 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 EGBN 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 EGBN is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of EGBN? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.