Cloud Peak Energy Inc (NYSE:CLD): Are Analysts’ Earnings Forecast Signalling Trouble Ahead?
Cloud Peak Energy Inc’s (NYSE:CLD) latest earnings update in December 2017 confirmed that the business entered the red zone with earnings dropping into the negative territory due to recent headwinds. Investors may find it useful to understand how market analysts perceive Cloud Peak Energy’s earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View our latest analysis for Cloud Peak Energy
Analysts’ outlook for the upcoming year seems pessimistic, with earnings becoming even more negative, generating -US$23.43M in 2019. Furthermore, earnings are expected to fall off in the following year, decreasing to -US$34.91M in 2020 and -US$45.29M in 2021.
Although it is helpful to understand the growth year by year relative to today’s level, it may be more insightful to estimate the rate at which the business is growing on average every year. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Cloud Peak Energy’s earnings trajectory over time, fluctuate up and down. 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 -47.43%. This means, we can anticipate Cloud Peak Energy will chip away at a rate of -47.43% every year for the next few years.
Next Steps:
For Cloud Peak Energy, I’ve compiled 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.
Future Earnings: How does CLD’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CLD? 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.
