As Cinemark Holdings, Inc. (NYSE:CNK) announced its earnings release on 31 December 2018, analysts seem fairly confident, with earnings expected to grow by 25% in the upcoming year compared with the past 5-year average growth rate of 10%. Currently with trailing-twelve-month earnings of US$213m, we can expect this to reach US$265m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Cinemark Holdings in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
What can we expect from Cinemark Holdings in the longer term?
The longer term expectations from the 11 analysts of CNK 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 understand the overall trajectory of CNK’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 12% based on the most recent earnings level of US$213m to the final forecast of US$311m by 2022. EPS reaches $2.65 in the final year of forecast compared to the current $1.83 EPS today. Margins are currently sitting at 6.6%, which is expected to expand to 8.8% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Cinemark Holdings, there are three relevant 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 Cinemark Holdings 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 Cinemark Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Cinemark Holdings? 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 firstname.lastname@example.org. 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.