Brookdale Senior Living Inc. (NYSE:BKD): Immense Growth Potential?

Simply Wall St

The latest earnings update Brookdale Senior Living Inc. (NYSE:BKD) released in December 2018 indicated company earnings became less negative compared to the previous year’s level as a result of recent tailwinds Today I want to provide a brief commentary on how market analysts predict Brookdale Senior Living’s earnings growth outlook over the next few 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.

View our latest analysis for Brookdale Senior Living

Analysts’ outlook for the coming year seems positive, with earnings becoming less negative, arriving at -US$263.5m in 2020. In the following year, earnings are expected to remain flat before falling to -US$137.6m in 2022.

NYSE:BKD Past and Future Earnings, February 26th 2019
NYSE:BKD Past and Future Earnings, February 26th 2019

Although it’s useful to understand the rate of growth each year relative to today’s value, it may be more insightful analyzing the rate at which the company is moving every year, on average. The benefit of this method is that we can get a better picture of the direction of Brookdale Senior Living’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’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 43%. This means that, we can assume Brookdale Senior Living will grow its earnings by 43% every year for the next couple of years.

Next Steps:

For Brookdale Senior Living, I’ve compiled three relevant factors 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 BKD 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 BKD is currently mispriced by the market.

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

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