Based on the latest analyst predictions, Corporate Travel Management Limited (ASX:CTD) is estimated to considerably grow its earnings by 88.07% in the upcoming three years. At a current EPS of A$0.535, this growth rate means shareholders can expect an impending EPS of A$1.007. To assess the reasonability of CTD’s earnings growth per share, we should look at its most recent growth rate delivered. Check out our latest analysis for Corporate Travel Management
How is Corporate Travel Management going to perform in the future?
Investors in Corporate Travel Management have been patiently waiting for the uptick in earnings and if you believe the analysts covering the stock then the following year will be very interesting. Expectation based on 7 analysts is strong, with earnings estimated to increase from current levels of A$0.535 to A$1.007 over the next couple of years. This indicates a relatively solid earnings per share growth rate of 88.07% over the next few years, which is an optimistic outlook in the near term. During the same time revenue is predicted to increase from A$326M to A$475M and net income is predicted to grow from A$55M to A$103M in the next couple of years, growing by 88.07%. At this level of revenue and profit, margins are predicted to be extremely healthy as well.
Basis for the growth
The past can be a helpful indicator for future performance for a stock. We can determine whether this level of expected growth is excessive or whether the company continues to go from strength to strength. CTD’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 CTD has already proven its capacity to grow at an elevated rate, which should give investors higher conviction of analysts’ consensus prediction for the company’s future growth going forward.
Next Steps:
For CTD, there are three pertinent 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 CTD 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 CTD is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CTD? 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.