Looking at Compass Minerals International, Inc.'s (NYSE:CMP) earnings update in December 2018, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 26% next year relative to the past 5-year average growth rate of -22%. By 2020, we can expect Compass Minerals International’s bottom line to reach US$86m, a jump from the current trailing-twelve-month of US$68m. Below is a brief commentary on the longer term outlook the market has for Compass Minerals International. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect Compass Minerals International to keep growing?
The longer term expectations from the 9 analysts of CMP is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 30% based on the most recent earnings level of US$68m to the final forecast of US$158m by 2022. This leads to an EPS of $5 in the final year of projections relative to the current EPS of $2.02. Margins are currently sitting at 4.6%, which is expected to expand to 9.4% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Compass Minerals International, there are three important 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 Compass Minerals International 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 Compass Minerals International is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Compass Minerals International? 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 email@example.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.