The most recent earnings release National Instruments Corporation’s (NASDAQ:NATI) announced in December 2017 showed that the business faced a significant headwind with earnings deteriorating by -36.65%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive National Instruments’s earnings growth outlook over the next couple of years and whether the future looks brighter. 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 National Instruments
Analysts’ expectations for this coming year seems optimistic, with earnings growth more than doubling. Earnings seem to continue strongly in the following year, finally generating US$168.84M in 2021.
While it’s informative knowing the growth year by year relative to today’s figure, it may be more beneficial to analyze the rate at which the business is growing every year, on average. The benefit of this method is that we can get a better picture of the direction of National Instruments’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute 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 34.54%. This means, we can expect National Instruments will grow its earnings by 34.54% every year for the next few years.
For National Instruments, I’ve put together 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 NATI 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 NATI is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of NATI? 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.