What Do Analysts Think About SilverBow Resources, Inc.'s (NYSE:SBOW) Long Term Outlook?
The most recent earnings release SilverBow Resources, Inc.'s (NYSE:SBOW) announced in December 2018 showed that the company experienced a small tailwind, eventuating to a single-digit earnings growth of 3.7%. Below is my commentary, albeit very simple and high-level, on how market analysts view SilverBow Resources's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for SilverBow Resources
Market analysts' prospects for the upcoming year seems buoyant, with earnings increasing by a robust 12%. This growth seems to continue into the following year with rates reaching double digit 30% compared to today’s earnings, and finally hitting US$140m by 2022.
While it’s informative knowing the growth rate each year relative to today’s value, it may be more insightful to evaluate the rate at which the company is growing on average every year. The benefit of this method is that we can get a bigger picture of the direction of SilverBow Resources's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 17%. This means, we can expect SilverBow Resources will grow its earnings by 17% every year for the next couple of years.
Next Steps:
For SilverBow Resources, there are three key aspects 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 SBOW 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 SBOW is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SBOW? 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.
