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What Should Investors Know About KLX Inc’s (NASDAQ:KLXI) Growth?

In January 2018, KLX Inc (NASDAQ:KLXI) released its most recent earnings announcement, which indicated that the company experienced a strong tailwind, leading to a double-digit earnings growth of 10.79%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive KLX’s earnings growth trajectory over the next few 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. See our latest analysis for KLX

Market analysts’ prospects for next year seems buoyant, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally arriving at US$208.96M in 2021.

NasdaqGS:KLXI Future Profit Mar 28th 18
NasdaqGS:KLXI Future Profit Mar 28th 18

Although it is helpful to understand the growth rate year by year relative to today’s value, it may be more insightful analyzing the rate at which the company is growing on average every year. The advantage of this technique is that we can get a bigger picture of the direction of KLX’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. 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 39.27%. This means, we can presume KLX will grow its earnings by 39.27% every year for the next couple of years.

Next Steps:

For KLX, I’ve put together three relevant factors you should further examine:

  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 KLXI 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 KLXI is currently mispriced by the market.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of KLXI? 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 pass 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.

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