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What Should Investors Know About HNI Corporation’s (NYSE:HNI) Growth?

Wade Goff

Since HNI Corporation (NYSE:HNI) released its earnings in September 2018, analysts seem fairly confident, as a 36% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 6.3%. By 2020, we can expect HNI’s bottom line to reach US$122m, a jump from the current trailing-twelve-month of US$90m. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

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How is HNI going to perform in the near future?

The 3 analysts covering HNI view its longer term outlook with a positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of HNI’s earnings growth over these next few years.

NYSE:HNI Future Profit January 16th 19

From the current net income level of US$90m and the final forecast of US$147m by 2022, the annual rate of growth for HNI’s earnings is 12%. This leads to an EPS of $3.46 in the final year of projections relative to the current EPS of $2.05. In 2022, HNI’s profit margin will have expanded from 4.1% to 6.1%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For HNI, I’ve put together three relevant aspects you should further research:

  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 HNI 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 HNI is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of HNI? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.