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Profire Energy, Inc. (NASDAQ:PFIE): Is It A Smart Long Term Opportunity?

Simply Wall St

Since Profire Energy, Inc. (NASDAQ:PFIE) released its earnings in December 2018, analysts seem cautiously optimistic, with earnings expected to grow by 4.6% in the upcoming year compared with the past 5-year average growth rate of -3.1%. Currently with trailing-twelve-month earnings of US$6.1m, we can expect this to reach US$6.4m by 2020. Below is a brief commentary on the longer term outlook the market has for Profire Energy. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

Check out our latest analysis for Profire Energy

How is Profire Energy going to perform in the near future?

The 4 analysts covering PFIE view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of PFIE's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NasdaqCM:PFIE Past and Future Earnings, April 10th 2019
NasdaqCM:PFIE Past and Future Earnings, April 10th 2019

From the current net income level of US$6.1m and the final forecast of US$11m by 2022, the annual rate of growth for PFIE’s earnings is 15%. EPS reaches $0.24 in the final year of forecast compared to the current $0.13 EPS today. With a current profit margin of 13%, this movement will result in a margin of 17% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Profire Energy, I've put together three fundamental aspects 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 Profire Energy 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 Profire Energy is currently mispriced by the market.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Profire Energy? 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 editorial-team@simplywallst.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.