What Are Analysts Saying About Columbia Sportswear Company’s (NASDAQ:COLM) Future?
In December 2018, Columbia Sportswear Company (NASDAQ:COLM) released its latest earnings announcement, which showed that the business gained from a substantial tailwind, more than doubling its earnings from the prior year. Below is my commentary, albeit very simple and high-level, on how market analysts view Columbia Sportswear’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Columbia Sportswear
Analysts’ expectations for this coming year seems buoyant, with earnings increasing by a robust 14%. This growth seems to continue into the following year with rates arriving at double digit 23% compared to today’s earnings, and finally hitting US$382m by 2022.
Although it is useful to understand the rate of growth year by year relative to today’s level, it may be more valuable analyzing the rate at which the business is growing on average every year. The advantage of this technique is that we can get a better picture of the direction of Columbia Sportswear’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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 11%. This means, we can expect Columbia Sportswear will grow its earnings by 11% every year for the next couple of years.
Next Steps:
For Columbia Sportswear, there are three relevant factors you should further examine:
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 COLM 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 COLM is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of COLM? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
