Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!
The most recent earnings announcement Northwest Natural Holding Company's (NYSE:NWN) released in December 2018 signalled that the business experienced a minor headwind with earnings falling from US$72m to US$67m, a change of -6.6%. Investors may find it useful to understand how market analysts view Northwest Natural Holding's earnings growth trajectory over the next few 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.
Analysts' outlook for this coming year seems rather subdued, with earnings growing by a single digit 1.2%. The growth outlook in the following year seems much more positive with rates arriving at double digit 13% compared to today’s earnings and falls to US$75m by 2022.
Even though it is useful to understand the growth year by year relative to today’s level, it may be more valuable to analyze the rate at which the company is growing on average every year. The pro of this approach is that we can get a bigger picture of the direction of Northwest Natural Holding's earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To calculate this rate, I've inserted 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 4.6%. This means that, we can presume Northwest Natural Holding will grow its earnings by 4.6% every year for the next few years.
For Northwest Natural Holding, I've put together three essential 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.
- Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for NWN's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of NWN? 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 email@example.com. 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.