In December 2018, Orrstown Financial Services, Inc. (NASDAQ:ORRF) released its most recent earnings announcement, which signalled that the business gained from a large tailwind, eventuating to a high double-digit earnings growth of 58%. Investors may find it useful to understand how market analysts perceive Orrstown Financial Services's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Analysts' outlook for this coming year seems positive, with earnings increasing by a robust 24%. This growth seems to continue into the following year with rates arriving at double digit 99% compared to today’s earnings, and finally hitting US$25m by 2022.
Although it’s helpful to be aware of the growth each year relative to today’s level, it may be more beneficial gauging the rate at which the company is moving every year, on average. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of Orrstown Financial Services's earnings trajectory over time, fluctuate up and down. To compute this rate, I've appended 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 15%. This means, we can expect Orrstown Financial Services will grow its earnings by 15% every year for the next few years.
For Orrstown Financial Services, there are three relevant 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 ORRF 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 ORRF is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ORRF? 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.