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What Should We Expect From Golden Ocean Group Limited’s (NASDAQ:GOGL) Earnings Over The Next Few Years?

Simply Wall St

In December 2018, Golden Ocean Group Limited (NASDAQ:GOGL) released its most recent earnings announcement, which confirmed that the company finally turned profitable after delivering negative earnings on average over the past couple of years. Investors may find it useful to understand how market analysts predict Golden Ocean Group’s earnings growth outlook over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for Golden Ocean Group

Analysts’ expectations for the upcoming year seems pessimistic, with earnings decreasing by a double-digit -37%. However, the next few years seem to illustrate a completely different picture, with expected earnings growth rates reaching double digit 91% compared to today’s level and continues to increase.

NasdaqGS:GOGL Past and Future Earnings, March 1st 2019

Even though it’s informative knowing the rate of growth each year relative to today’s level, it may be more insightful to determine the rate at which the company is moving on average every year. The advantage of this approach is that we can get a better picture of the direction of Golden Ocean Group’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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 33%. This means that, we can assume Golden Ocean Group will grow its earnings by 33% every year for the next couple of years.

Next Steps:

For Golden Ocean Group, I’ve compiled three essential factors you should further research:

  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 GOGL 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 GOGL is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of GOGL? 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.