Cochin Shipyard Limited (NSE:COCHINSHIP): Is It A Good Long Term Opportunity?
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The most recent earnings release Cochin Shipyard Limited's (NSE:COCHINSHIP) announced in March 2019 confirmed that the company experienced a robust tailwind, eventuating to a double-digit earnings growth of 21%. Below, I've presented key growth figures on how market analysts perceive Cochin Shipyard'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.
See our latest analysis for Cochin Shipyard
Market analysts' consensus outlook for next year seems pessimistic, with earnings declining by -0.6%. But in the following year, there's contrast in performance, with earnings growth rates generating double digit 6.2% compared to today’s level before reducing. to ₹4.4b in 2022.
While it is helpful to understand the rate of growth each year relative to today’s level, it may be more valuable to estimate the rate at which the company is moving every year, on average. The advantage of this technique is that we can get a better picture of the direction of Cochin Shipyard's earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute this rate, I've inserted 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 0.5%. This means that, we can anticipate Cochin Shipyard will grow its earnings by 0.5% every year for the next couple of years.
Next Steps:
For Cochin Shipyard, I've compiled three fundamental factors 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 COCHINSHIP 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 COCHINSHIP is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of COCHINSHIP? 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 editorial-team@simplywallst.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.
