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What Should Investors Know About Apergy Corporation's (NYSE:APY) Growth?

Simply Wall St

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In March 2019, Apergy Corporation (NYSE:APY) released its earnings update. Generally, analyst consensus outlook appear cautiously optimistic, with profits predicted to increase by 25% next year, though this is comparatively lower than the past 5-year average earnings growth of 31%. By 2020, we can expect Apergy’s bottom line to reach US$117m, a jump from the current trailing-twelve-month of US$94m. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Apergy in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for Apergy

What can we expect from Apergy in the longer term?

Over the next three years, it seems the consensus view of the 9 analysts covering APY is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for APY, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NYSE:APY Past and Future Earnings, July 3rd 2019

By 2022, APY's earnings should reach US$226m, from current levels of US$94m, resulting in an annual growth rate of 27%. EPS reaches $2.62 in the final year of forecast compared to the current $1.22 EPS today. With a current profit margin of 7.7%, this movement will result in a margin of 14% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Apergy, I've compiled three pertinent aspects 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 Apergy 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 Apergy is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Apergy? 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.