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Will Exponent, Inc.'s (NASDAQ:EXPO) Earnings Grow In The Year Ahead?

Simply Wall St

On 29 March 2019, Exponent, Inc. ( NASDAQ:EXPO ) released its earnings update. Generally, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 3.8% in the upcoming year compared with the higher past 5-year average growth rate of 9.6%. By 2020, we can expect Exponent’s bottom line to reach US$75m, a jump from the current trailing-twelve-month of US$72m. Below is a brief commentary around Exponent's earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here .

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View our latest analysis for Exponent

Can we expect Exponent to keep growing?

The longer term view from the 4 analysts covering EXPO is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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 EXPO's earnings growth over these next few years.

NasdaqGS:EXPO Past and Future Earnings, May 20th 2019

By 2022, EXPO's earnings should reach US$91m, from current levels of US$72m, resulting in an annual growth rate of 7.6%. EPS reaches $1.72 in the final year of forecast compared to the current $1.37 EPS today. Margins are currently sitting at 20%, approximately the same as previous years. With analysts forecasting revenue growth of 0.2498 and EXPO's net income growth expected to roughly track that, this company may add value for shareholders over time.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Exponent, there are three essential 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 Exponent 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 Exponent is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Exponent? 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.