The latest earnings release Rush Enterprises Inc’s (NASDAQ:RUSH.B) announced in December 2017 suggested that the company gained from a substantial tailwind, more than doubling its earnings from the prior year. Below, I’ve presented key growth figures on how market analysts perceive Rush Enterprises’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. 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 Rush Enterprises

Market analysts’ consensus outlook for the coming year seems pessimistic, with earnings declining by a double-digit -32.58%. Over the medium term, earnings should continue to be below today’s level, with a decline of -23.35% in 2020, eventually reaching US$131.94M in 2021.

Even though it is informative knowing the growth rate year by year relative to today’s figure, it may be more insightful analyzing the rate at which the company is moving every year, on average. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of Rush Enterprises’s earnings trajectory over time, fluctuate up and down. To compute this rate, I’ve inserted 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 -9.40%. This means, we can expect Rush Enterprises will chip away at a rate of -9.40% every year for the next few years.

Next Steps:

For Rush Enterprises, there are three fundamental aspects 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 RUSH.B 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 RUSH.B is currently mispriced by the market.

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