Based on Expeditors International of Washington Inc’s (NASDAQ:EXPD) earnings update in December 2017, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 7.54% next year relative to the past 5-year average growth rate of 4.05%. By 2019, we can expect Expeditors International of Washington’s bottom line to reach US$526.23M, a jump from the current US$489.35M. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here. Check out our latest analysis for Expeditors International of Washington

Can we expect Expeditors International of Washington to keep growing?

The longer term expectations from the 12 analysts of EXPD is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

This results in an annual growth rate of 6.55% based on the most recent earnings level of US$489.35M to the final forecast of US$596.35M by 2021. This leads to an EPS of $3.46 in the final year of projections relative to the current EPS of $2.73. Growth in the bottom line seems to suggest reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. With a current profit margin of 7.07%, this movement will result in a margin of 7.21% by 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Expeditors International of Washington, there are three fundamental factors you should further examine:

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 Expeditors International of Washington 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 Expeditors International of Washington is currently mispriced by the market.

3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Expeditors International of Washington? 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.