Costa Group Holdings Limited (ASX:CGC) is predicted to grow its earnings per share by a high double-digit 64.51% over the next three years. Presently, with an EPS of $0.181, we can expect an upcoming EPS of $0.298. To determine whether this growth rate expectation is justified, we should take a look at how the company has been performing in the past. Check out our latest analysis for Costa Group Holdings
How is Costa Group Holdings going to perform in the future?
According to the analysts covering the company, in a few years should bring some good growth prospects for Costa Group Holdings. Expectation of stock’s 6 analysts is high, with earnings expected to rise from today’s level of $0.181 to $0.298 over the next couple of years. This indicates a relatively solid earnings per share growth rate of 64.51% over the next few years, which is an optimistic outlook in the near term. During the same time we should see the revenue increase from $909M to $1,230M and profit is predicted to grow from $58M to $95M in the next couple of years, roughly growing 1.7x. Margins are expected to be muted at a single digit rate of 7.80%.
Is the growth built on solid basis?
The past can be a great indicator for future performance for a stock. We can determine whether this level of expected growth is sustainable and whether the company continues to go from strength to strength. CGC’s triple-digit earnings growth the past couple of years indicates that the company’s past performance is quite revealing of future outcome. This means CGC has already proven its capacity to grow at a robust rate, which should give investors higher conviction of analysts’ consensus prediction for the company’s future growth going forward.
Next Steps:
For CGC, there are three fundamental aspects you should further research:
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 CGC 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 CGC is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CGC? 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.