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Based on At Home Group Inc.'s (NYSE:HOME) earnings update in January 2019, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 38% next year, though this is noticeably lower than the historical 5-year average earnings growth of 47%. With trailing-twelve-month net income at current levels of US$49m, we should see this rise to US$67m in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for At Home Group in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Exciting times ahead?
The longer term view from the 11 analysts covering HOME is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$49m and the final forecast of US$106m by 2022, the annual rate of growth for HOME’s earnings is 20%. EPS reaches $1.59 in the final year of forecast compared to the current $0.78 EPS today. With a current profit margin of 4.2%, this movement will result in a margin of 5.6% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For At Home Group, there are three important 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.
- Future Earnings: How does At Home Group's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of At Home Group? 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 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.