CSI Compressco LP (NASDAQ:CCLP): What Does The Future Look Like?
CSI Compressco LP’s (NASDAQ:CCLP) released its most recent earnings update in September 2017, which confirmed company earnings became less negative compared to the previous year’s level as a result of recent tailwinds Today I want to provide a brief commentary on how market analysts perceive CSI Compressco’s earnings growth outlook over the next few years and whether the future looks brighter. 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. See our latest analysis for CSI Compressco
Market analysts’ consensus outlook for next year seems optimistic, with earnings becoming less negative, generating $-30.4M in 2018. Additionally, earnings should continue its upward direction, reaching $-19.2M in 2019, and $-12.7M in 2020.
While it is helpful to be aware of the growth year by year relative to today’s figure, it may be more valuable to analyze the rate at which the earnings are moving every year, on average. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of CSI Compressco’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted 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 37.45%. This means that, we can anticipate CSI Compressco will grow its earnings by 37.45% every year for the next few years.
Next Steps:
For CSI Compressco, there are three essential factors you should look at:
1. 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.
2. Valuation: What is CCLP 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 CCLP is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CCLP? 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.
