Yahoo Finance YRC Worldwide Inc. (NASDAQ:YRCW): What Are The Future Prospects?
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The latest earnings release YRC Worldwide Inc.'s (NASDAQ:YRCW) announced in December 2018 indicated that the company finally turned profitable after delivering losses on average over the past few years. Today I want to provide a brief commentary on how market analysts perceive YRC Worldwide's earnings growth outlook over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for YRC Worldwide
Market analysts' consensus outlook for the coming year seems optimistic, with earnings climbing by a robust 30%. This growth seems to continue into the following year with rates arriving at double digit 77% compared to today’s earnings, and finally hitting US$46m by 2022.
Even though it is useful to be aware of the rate of growth each year relative to today’s value, it may be more insightful analyzing the rate at which the company is growing every year, on average. The advantage of this method is that we can get a bigger picture of the direction of YRC Worldwide's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate 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 27%. This means, we can anticipate YRC Worldwide will grow its earnings by 27% every year for the next couple of years.
Next Steps:
For YRC Worldwide, there are three pertinent factors you should look at:
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 YRCW 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 YRCW is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of YRCW? 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.
