U.S. Markets closed

SpartanNash Company (NASDAQ:SPTN): Is It A Smart Long Term Opportunity?

Simply Wall St

Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!

As SpartanNash Company (NASDAQ:SPTN) announced its earnings release on 29 December 2018, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 48% in the upcoming year compared with the past 5-year average growth rate of -14%. With trailing-twelve-month net income at current levels of US$33m, we should see this rise to US$49m in 2020. Below is a brief commentary on the longer term outlook the market has for SpartanNash. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

View our latest analysis for SpartanNash

What can we expect from SpartanNash in the longer term?

Longer term expectations from the 6 analysts covering SPTN’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. 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 SPTN’s earnings growth over these next few years.

NasdaqGS:SPTN Past and Future Earnings, March 26th 2019

From the current net income level of US$33m and the final forecast of US$69m by 2022, the annual rate of growth for SPTN’s earnings is 15%. EPS reaches $1.98 in the final year of forecast compared to the current $0.94 EPS today. Margins are currently sitting at 0.4%, which is expected to expand to 0.8% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For SpartanNash, there are three fundamental factors you should further research:

  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 SpartanNash 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 SpartanNash is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SpartanNash? 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.