After Blue Buffalo Pet Products Inc’s (NASDAQ:BUFF) earnings announcement in December 2017, the consensus outlook from analysts appear fairly confident, as a 21.50% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 19.48%. Presently, with earnings at US$193.53M, we should see this growing to US$235.13M by 2019. Below is a brief commentary on the longer term outlook the market has for Blue Buffalo Pet Products. Investors wanting to learn more about other aspects of the company should research its fundamentals here. View our latest analysis for Blue Buffalo Pet Products

What can we expect from Blue Buffalo Pet Products in the longer term?

The longer term view from the 10 analysts covering BUFF is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for BUFF, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

This results in an annual growth rate of 17.85% based on the most recent earnings level of US$193.53M to the final forecast of US$337.85M by 2021. This leads to an EPS of $1.7 in the final year of projections relative to the current EPS of $0.99. Earnings growth appears to be a result of cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. Margins is currently sitting at 15.18%, which is expected to expand to 19.20% by 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Blue Buffalo Pet Products, 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 Blue Buffalo Pet Products 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 Blue Buffalo Pet Products is currently mispriced by the market.

3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Blue Buffalo Pet Products? 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 pass 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.