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What Should Investors Know About Jack in the Box Inc.'s (NASDAQ:JACK) Future?

Simply Wall St

Looking at Jack in the Box Inc.'s (NASDAQ:JACK) earnings update on 07 July 2019, analyst consensus outlook appear cautiously optimistic, as a 24% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 1.8%. Currently with trailing-twelve-month earnings of US$104m, we can expect this to reach US$129m by 2020. Below is a brief commentary on the longer term outlook the market has for Jack in the Box. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

Check out our latest analysis for Jack in the Box

Exciting times ahead?

The longer term view from the 17 analysts covering JACK is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for JACK, 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.

NasdaqGS:JACK Past and Future Earnings, August 31st 2019

By 2022, JACK's earnings should reach US$149m, from current levels of US$104m, resulting in an annual growth rate of 8.0%. EPS reaches $6.71 in the final year of forecast compared to the current $3.66 EPS today. Margins are currently sitting at 12%, which is expected to expand to 15% by 2022.

Next Steps:

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