SRC Energy Inc. (NYSEMKT:SRCI): What Does The Future Look Like?
The most recent earnings release SRC Energy Inc.’s (NYSEMKT:SRCI) announced in December 2018 revealed that the company benefited from a strong tailwind, eventuating to a high double-digit earnings growth of 82%. Below, I’ve laid out key numbers on how market analysts predict SRC Energy’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
See our latest analysis for SRC Energy
Analysts’ outlook for the upcoming year seems pessimistic, with earnings decreasing by a double-digit -21%. In the following year, earnings begin to improve, but face another fall in 2022 with earnings arriving at US$224m.
Although it is informative knowing the growth year by year relative to today’s figure, it may be more beneficial analyzing the rate at which the business is growing every year, on average. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of SRC Energy’s earnings trajectory over time, fluctuate up and down. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -1.0%. This means, we can assume SRC Energy will chip away at a rate of -1.0% every year for the next couple of years.
Next Steps:
For SRC Energy, I’ve compiled three relevant aspects you should look at:
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 SRCI 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 SRCI is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SRCI? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.
