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Chatham Lodging Trust's (NYSE:CLDT) most recent earnings update in December 2018 indicated that the company benefited from a small tailwind, eventuating to a single-digit earnings growth of 3.7%. Below, I've laid out key growth figures on how market analysts predict Chatham Lodging Trust's earnings growth outlook over the next couple of 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.
Analysts' expectations for the upcoming year seems pessimistic, with earnings declining by -4.9%. Beyond this, earnings are expected to continue to be below today's level, with a reduction of -0.6% in 2021, eventually reaching US$30m in 2022.
Even though it’s informative understanding the growth rate year by year relative to today’s figure, it may be more valuable analyzing the rate at which the earnings are moving on average every year. The pro of this method is that we can get a better picture of the direction of Chatham Lodging Trust'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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 0.1%. This means, we can presume Chatham Lodging Trust will grow its earnings by 0.1% every year for the next couple of years.
For Chatham Lodging Trust, there are three essential aspects you should look at:
- 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 CLDT 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 CLDT is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CLDT? 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.