Warrior Met Coal Inc (NYSE:HCC): What Does The Future Look Like?
Since Warrior Met Coal Inc (NYSE:HCC) released its earnings in September 2017, analyst consensus outlook seem pessimistic, with earnings expected to decline by -38.96% in the upcoming year against the past 5-year average growth rate of 188.99%. With net income at current levels of $-49.7M, the consensus growth rate suggests that earnings will decline to $-30.3M by 2018. Below is a brief commentary on the longer term outlook the market has for HCC. Investors wanting to learn more about other aspects of Warrior Met Coal should research its fundamentals here. Check out our latest analysis for Warrior Met Coal
How will Warrior Met Coal perform in the near future?
The view from 8 analysts over the next three years is one of negative sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of HCC’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.
By 2020, HCC’s earnings should reach $-8.7M, from current levels of $-49.7M, resulting in an annual growth rate of -49.37%. However, if we exclude extraordinary items from earnings, we see that the profits is predicted to rise over time, resulting in an EPS of $1.24 in the final year of forecast compared to the current $-13.15 EPS today. Earnings decline appears to be a result of a falling top-line, with negative growth of -10.15%. Furthermore, the current -13.46% margin is expected to contract to -3.09% by the end of 2020.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Warrior Met Coal, there are 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 HCC 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 HCC is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of HCC? 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.
