Yahoo Finance What Are Analysts Saying About TD Ameritrade Holding Corporation’s (NASDAQ:AMTD) Earnings Trend?
TD Ameritrade Holding Corporation’s (NASDAQ:AMTD) latest earnings update in September 2018 showed that the business experienced a strong tailwind, eventuating to a high double-digit earnings growth of 69%. Investors may find it useful to understand how market analysts perceive TD Ameritrade Holding’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for TD Ameritrade Holding
Analysts’ outlook for the upcoming year seems buoyant, with earnings rising by a robust 45%. This growth seems to continue into the following year with rates arriving at double digit 58% compared to today’s earnings, and finally hitting US$2.6b by 2021.
Although it’s useful to understand the growth rate year by year relative to today’s value, it may be more valuable evaluating the rate at which the business is rising or falling on average every year. The advantage of this method is that we can get a better picture of the direction of TD Ameritrade Holding’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 15%. This means that, we can presume TD Ameritrade Holding will grow its earnings by 15% every year for the next couple of years.
Next Steps:
For TD Ameritrade Holding, there are three relevant factors you should further research:
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 AMTD 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 AMTD is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AMTD? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
