Will Patterson Companies Inc’s (PDCO) Earnings Grow Over The Next Year?
Patterson Companies Inc (NASDAQ:PDCO) is predicted to grow its earnings per share by a robust double-digit 45.45% over the next three years. With the recent EPS being $1.756, expected growth will push the upcoming EPS to $2.554. Today I will look at the latest data in order to investigate whether this expected growth rate is plausible. View our latest analysis for Patterson Companies
Can we expect PDCO to keep growing?
Analyst expectation from the stock’s 14 analysts is one of positive sentiment, with earnings estimated to expand from current levels of $1.756 to $2.554 over the next couple of years. This indicates a relatively solid earnings per share growth rate of 45.45% over the next few years, which is an optimistic outlook in the near term. In the same period revenue is predicted to grow from $5,565M to $6,090M and profit is predicted to slightly grow from $166M to $241M in the next couple of years, growing by 45.45%. Though, at the current levels of revenue and profit, margins are certainly underwhelming.
Is the growth built on solid basis?
The past can be a helpful indicator for future performance for a stock. We can determine whether this level of expected growth is highly excessive or whether the company has consistently exhibited strength. However, PDCO’s earnings growth in the past couple of years has been negative at -3.05%. Although its past performance is not supportive of a positive growth trend, it could also mean PDCO is growing off a lower base, meaning a higher growth rate is easier to achieve. This sign change in growth could indicate a turnaround initiative.
Next Steps:
For PDCO, I’ve compiled three fundamental factors you should look at:
1. 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.
2. Valuation: What is PDCO 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 PDCO is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of PDCO? 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.
