Yahoo Finance What Should You Know About Cleanaway Waste Management Limited’s (ASX:CWY) Growth?
Looking at Cleanaway Waste Management Limited’s (ASX:CWY) earnings update in June 2018, analysts seem cautiously bearish, with earnings expected to grow by 19.2% in the upcoming year against the higher past 5-year average growth rate of 66.5%. With trailing-twelve-month net income at current levels of AU$103.5m, we should see this rise to AU$123.4m in 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Cleanaway Waste Management in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
See our latest analysis for Cleanaway Waste Management
Can we expect Cleanaway Waste Management to keep growing?
Over the next three years, it seems the consensus view of the 7 analysts covering CWY is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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 15.5% based on the most recent earnings level of AU$103.5m to the final forecast of AU$176.1m by 2021. EPS reaches A$0.086 in the final year of forecast compared to the current A$0.056 EPS today. The main reason for growth is a result of cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 6.0%, this movement will result in a margin of 7.2% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Cleanaway Waste Management, I’ve compiled three key factors you should further research:
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 Cleanaway Waste Management 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 Cleanaway Waste Management is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Cleanaway Waste Management? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
