Yahoo Finance Will Fastenal Company’s (NASDAQ:FAST) Earnings Grow In The Next 12 Months?
In June 2018, Fastenal Company (NASDAQ:FAST) released its earnings update. Generally, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 13.4% in the upcoming year compared with the past 5-year average growth rate of 7.1%. With trailing-twelve-month net income at current levels of US$681.0m, we should see this rise to US$772.3m in 2019. Below is a brief commentary on the longer term outlook the market has for Fastenal. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for Fastenal
How is Fastenal going to perform in the near future?
The longer term view from the 12 analysts covering FAST 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 FAST’s earnings growth over these next few years.
From the current net income level of US$578.6m and the final forecast of US$776.4m by 2021, the annual rate of growth for FAST’s earnings is 8.5%. This leads to an EPS of $3.2 in the final year of projections relative to the current EPS of $2.01. Growth in the bottom line seems to suggest cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 13.2%, this movement will result in a margin of 13.9% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Fastenal, there are three important 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 Fastenal 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 Fastenal is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Fastenal? 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.
