In This Article:
The latest earnings announcement Cedar Woods Properties Limited (ASX:CWP) released in June 2018 showed that the company experienced a slight headwind with earnings declining from AU$45.4m to AU$42.6m, a change of -6.3%. Below, I’ve laid out key growth figures on how market analysts predict Cedar Woods Properties’s earnings growth trajectory over the next couple of 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.
See our latest analysis for Cedar Woods Properties
Analysts’ expectations for the upcoming year seems positive, with earnings expanding by a robust 26.3%. This growth seems to continue into the following year with rates reaching double digit 42.1% compared to today’s earnings, and finally hitting AU$62.8m by 2021.
Although it is informative understanding the growth each year relative to today’s value, it may be more insightful to analyze the rate at which the business is rising or falling every year, on average. The pro of this approach is that we can get a better picture of the direction of Cedar Woods Properties’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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 13.2%. This means that, we can assume Cedar Woods Properties will grow its earnings by 13.2% every year for the next couple of years.
Next Steps:
For Cedar Woods Properties, there are three essential aspects you should further research:
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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.
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Valuation: What is CWP 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 CWP is currently mispriced by the market.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CWP? 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.