As Jack in the Box Inc. (NASDAQ:JACK) released its latest earnings announcement on 20 January 2019, analyst forecasts seem pessimistic, as a -14% fall in profits is expected in the upcoming year compared with the past 5-year average growth rate of 4.4%. With trailing-twelve-month net income at current levels of US$104m, the consensus growth rate suggests that earnings will decline to US$90m by 2020. Below is a brief commentary around Jack in the Box’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How will Jack in the Box perform in the near future?
The 16 analysts covering JACK view its longer term outlook with a positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of JACK’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, JACK’s earnings should reach US$101m, from current levels of US$104m, resulting in an annual growth rate of 3.8%. EPS reaches $6.03 in the final year of forecast compared to the current $3.66 EPS today. However, the expansion of the current 12% margin is not expected to be sustained, as it begins to contract to 9.9% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Jack in the Box, I’ve put together three pertinent 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 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.
- 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 firstname.lastname@example.org. 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.