Intel Corporation’s (NASDAQ:INTC) latest earnings announcement in December 2018 suggested that the business experienced a significant tailwind, more than doubling its earnings from the prior year. Below, I’ve presented key growth figures on how market analysts perceive Intel’s earnings growth trajectory over the next few 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.
Market analysts’ consensus outlook for next year seems pessimistic, with earnings falling by -6.9%. Beyond this, earnings are predicted to continue to be below today’s level, with a fall of -4.8% in 2021, eventually reaching US$20b in 2022.
Even though it’s helpful to be aware of the growth each year relative to today’s figure, it may be more valuable estimating the rate at which the business is growing on average every year. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of Intel’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put 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 -1.5%. This means, we can expect Intel will chip away at a rate of -1.5% every year for the next couple of years.
For Intel, I’ve put together three fundamental aspects you should further research:
- 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 INTC 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 INTC is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of INTC? 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 firstname.lastname@example.org. 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.