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CubeSmart (NYSE:CUBE): Are Analysts Bullish?

Simply Wall St

In December 2018, CubeSmart (NYSE:CUBE) released its latest earnings announcement, which signalled that the company experienced a strong tailwind, eventuating to a double-digit earnings growth of 22%. Below, I’ve presented key growth figures on how market analysts perceive CubeSmart’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.

See our latest analysis for CubeSmart

Analysts’ outlook for the upcoming year seems pessimistic, with earnings decreasing by -9.6%. Beyond this, earnings are predicted to continue to be below today’s level, with a decline of -1.9% in 2021, eventually reaching US$161m in 2022.

NYSE:CUBE Past and Future Earnings, March 18th 2019

Although it’s informative knowing the rate of growth each year relative to today’s level, it may be more valuable evaluating the rate at which the earnings are growing every year, on average. The pro of this technique is that we can get a better picture of the direction of CubeSmart’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put 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 5.0%. This means that, we can assume CubeSmart will grow its earnings by 5.0% every year for the next few years.

Next Steps:

For CubeSmart, there are three fundamental 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 CUBE 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 CUBE is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CUBE? 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.