The latest earnings release HD Supply Holdings Inc’s (NASDAQ:HDS) announced in January 2018 signalled that the company benefited from a major tailwind, more than doubling its earnings from the prior year. Below is a brief commentary on my key takeaways on how market analysts perceive HD Supply Holdings’s earnings growth outlook 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. See our latest analysis for HD Supply Holdings
Market analysts’ prospects for the upcoming year seems positive, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally arriving at US$532.59M in 2021.
While it is helpful to be aware of the growth each year relative to today’s value, it may be more insightful to gauge the rate at which the earnings are rising or falling on average every year. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of HD Supply Holdings’s earnings trajectory over time, 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 32.10%. This means that, we can anticipate HD Supply Holdings will grow its earnings by 32.10% every year for the next few years.
For HD Supply Holdings, I’ve put together three key 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 HDS 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 HDS is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of HDS? 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.