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As Forward Air Corporation (NASDAQ:FWRD) announced its earnings release on 31 December 2018, it seems that analyst expectations are fairly bearish, as a 4.5% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 12%. Presently, with latest-twelve-month earnings at US$92m, we should see this growing to US$96m by 2020. Below is a brief commentary on the longer term outlook the market has for Forward Air. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
How is Forward Air going to perform in the near future?
The longer term expectations from the 7 analysts of FWRD is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for FWRD, 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.
This results in an annual growth rate of 8.0% based on the most recent earnings level of US$92m to the final forecast of US$126m by 2022. EPS reaches $4.79 in the final year of forecast compared to the current $3.14 EPS today. In 2022, FWRD’s profit margin will have expanded from 7.0% to 7.7%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Forward Air, I’ve put together three fundamental 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 Forward Air 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 Forward Air is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Forward Air? 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 email@example.com.