California Water Service Group (NYSE:CWT) is expected to deliver a solid 29.44% in earnings growth per share over the next three years. Presently, with an EPS of $1.201, we can expect an upcoming EPS of $1.555. To assess the reasonability of CWT’s earnings growth per share, we should look at its most recent growth rate delivered. View our latest analysis for California Water Service Group
Exciting times ahead for CWT
Analyst expectation from the stock’s 5 analysts is one of positive sentiment, with earnings estimated to expand from current levels of $1.201 to $1.555 over the next couple of years. This illustrates a relatively optimistic outlook in the near term, with a relatively solid earnings per share growth rate of 29.44% over the next few years. During the same time revenue is expected to increase from $628M to $732M and profits (net income) are predicted to slightly grow from $58M to $75M in the next couple of years, roughly staying around the same level. However, margins look rather unappealing at the current levels of revenue and earnings.
Is this similar growth to the past?
The past can be a great 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. CWT’s earnings growth in the last five years was a weaker 1.59%, indicating a relatively more upbeat attitude towards the company in the upcoming year. This belief may be supported by turnaround initiatives implemented in the past, or previous investments coming to fruition.
For CWT, I’ve put together three essential factors you should look at:
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. Management:Have insiders been ramping up their shares to take advantage of the market’s sentiment for CWT’s future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CWT? 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.