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First Internet Bancorp (NASDAQ:INBK): Immense Growth Potential?

Simply Wall St

Based on First Internet Bancorp's (NASDAQ:INBK) earnings update on 31 March 2019, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by 19% next year relative to the higher past 5-year average growth rate of 34%. By 2020, we can expect First Internet Bancorp’s bottom line to reach US$26m, a jump from the current trailing-twelve-month of US$22m. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

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View our latest analysis for First Internet Bancorp

How is First Internet Bancorp going to perform in the near future?

The 5 analysts covering INBK view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of INBK's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NasdaqGS:INBK Past and Future Earnings, May 17th 2019
NasdaqGS:INBK Past and Future Earnings, May 17th 2019

From the current net income level of US$22m and the final forecast of US$30m by 2022, the annual rate of growth for INBK’s earnings is 9.2%. EPS reaches $2.65 in the final year of forecast compared to the current $2.31 EPS today. In 2022, INBK's profit margin will have expanded from 33% to 37%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For First Internet Bancorp, I've put together three important factors 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 First Internet Bancorp 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 First Internet Bancorp is currently mispriced by the market.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of First Internet Bancorp? 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.