Cleanaway Waste Management Limited (ASX:CWY): What Can We Expect From This High Growth Stock?
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The most recent earnings update Cleanaway Waste Management Limited’s (ASX:CWY) released in June 2018 confirmed that the company experienced a robust tailwind, eventuating to a double-digit earnings growth of 42.8%. Investors may find it useful to understand how market analysts view Cleanaway Waste Management’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for Cleanaway Waste Management
Market analysts’ prospects for next year seems positive, with earnings rising by a robust 19.2%. This growth seems to continue into the following year with rates reaching double digit 43.1% compared to today’s earnings, and finally hitting AU$176.1m by 2021.
Although it’s useful to understand the growth year by year relative to today’s value, it may be more valuable gauging the rate at which the company is moving every year, on average. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Cleanaway Waste Management’s earnings trajectory over time, 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 15.5%. This means, we can presume Cleanaway Waste Management will grow its earnings by 15.5% every year for the next couple of years.
Next Steps:
For Cleanaway Waste Management, I’ve put together three pertinent factors 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 CWY 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 CWY 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 CWY? 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.