After WD-40 Company's (NASDAQ:WDFC) recent earnings announcement in February 2019, analyst forecasts appear to be pessimistic, with earnings expected to decline by 0.3% in the upcoming year against the past 5-year average growth rate of 9.7%. Presently, with latest-twelve-month earnings at US$65m, we should see this fall to US$65m by 2020. Below is a brief commentary on the longer term outlook the market has for WD-40. For those interested in more of an analysis of the company, you can research its fundamentals here.
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Exciting times ahead?
Over the next three years, it seems the consensus view of the 2 analysts covering WDFC is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of WDFC's earnings growth over these next few years.
By 2022, WDFC's earnings should reach US$77m, from current levels of US$65m, resulting in an annual growth rate of 7.6%. This leads to an EPS of $5.82 in the final year of projections relative to the current EPS of $4.65. Margins are currently sitting at 16%, approximately the same as previous years. With analysts forecasting revenue growth of 0.19173 and WDFC's net income growth expected to roughly track that, this company may add value for shareholders over time.
Future outlook is only one aspect when you're building an investment case for a stock. For WD-40, I've compiled three key aspects 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 WD-40 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 WD-40 is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of WD-40? 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.