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The most recent earnings release CR Capital Real Estate AG's (ETR:CRZK) announced in June 2019 suggested that the business benefited from a robust tailwind, leading to a double-digit earnings growth of 35%. Below is my commentary, albeit very simple and high-level, on how market analysts predict CR Capital Real Estate's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Market analysts' prospects for this coming year seems optimistic, with earnings growing by a robust 15%. This growth seems to continue into the following year with rates reaching double digit 41% compared to today’s earnings, and finally hitting €12m by 2022.
Even though it’s informative knowing the growth year by year relative to today’s value, it may be more beneficial to evaluate the rate at which the business is moving every year, on average. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of CR Capital Real Estate's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've appended 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 14%. This means, we can assume CR Capital Real Estate will grow its earnings by 14% every year for the next couple of years.
For CR Capital Real Estate, I've compiled three relevant factors you should further research:
- 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 CRZK 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 CRZK is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CRZK? 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.