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Will G-III Apparel Group, Ltd.'s (NASDAQ:GIII) Earnings Grow In The Years Ahead?

Simply Wall St

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G-III Apparel Group, Ltd.'s (NASDAQ:GIII) latest earnings announcement in January 2019 signalled that the company experienced a substantial tailwind, more than doubling its earnings from the prior year. Today I want to provide a brief commentary on how market analysts perceive G-III Apparel Group's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

View our latest analysis for G-III Apparel Group

Analysts' outlook for this coming year seems optimistic, with earnings climbing by a robust 19%. This growth seems to continue into the following year with rates arriving at double digit 33% compared to today’s earnings, and finally hitting US$212m by 2022.

NasdaqGS:GIII Past and Future Earnings, May 29th 2019

While it is informative knowing the growth year by year relative to today’s level, it may be more valuable determining the rate at which the company is rising or falling every year, on average. The pro of this method is that we can get a bigger picture of the direction of G-III Apparel 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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 12%. This means that, we can presume G-III Apparel Group will grow its earnings by 12% every year for the next few years.

Next Steps:

For G-III Apparel Group, I've compiled three key factors you should further examine:

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