In December 2017, Itron Inc (NASDAQ:ITRI) announced its most recent earnings update, which indicated that the business experienced a sizeable tailwind, eventuating to a high double-digit earnings growth of 80.35%. Below, I’ve presented key growth figures on how market analysts view Itron’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. Check out our latest analysis for Itron
Analysts’ outlook for the upcoming year seems pessimistic, with earnings turning into a loss in 2019. However, ITRI isn’t in the red zone for long, with earnings predicted to bounce bank the following year, arriving at US$140.82M and eventually climbing to US$202.08M in 2021.
While it’s informative knowing the rate of growth year by year relative to today’s level, it may be more insightful to estimate the rate at which the earnings are moving on average every year. The pro of this technique is that we can get a better picture of the direction of Itron’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 52.15%. This means, we can expect Itron will grow its earnings by 52.15% every year for the next few years.
For Itron, there are three pertinent factors you should further examine:
- 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 ITRI 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 ITRI is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ITRI? 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.