After Sirius XM Holdings Inc.'s ( NASDAQ:SIRI ) earnings announcement on 31 March 2019, analyst forecasts appear to be bearish, with profits predicted to drop by 1.8% next year relative to the past 5-year average growth rate of 20%. Currently with a trailing-twelve-month profit of US$1.2b, the consensus growth rate suggests that earnings will drop to US$1.2b by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Sirius XM Holdings in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here .
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Can we expect Sirius XM Holdings to keep growing?
The view from 13 analysts over the next three years 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. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 12% based on the most recent earnings level of US$1.2b to the final forecast of US$1.5b by 2022. EPS reaches $0.32 in the final year of forecast compared to the current $0.26 EPS today. However, the expansion of the current 20% margin is not expected to be sustained, as it begins to contract to 18% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Sirius XM Holdings, I've put together three important factors you should further examine:
- 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 Sirius XM Holdings 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 Sirius XM Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Sirius XM Holdings? 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 firstname.lastname@example.org . 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.