CubeSmart’s (NYSE:CUBE) latest earnings update in December 2017 revealed that the business experienced a strong tailwind, eventuating to a high double-digit earnings growth of 68.02%. Today I want to provide a brief commentary on how market analysts view CubeSmart’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. See our latest analysis for CubeSmart
Analysts’ expectations for this coming year seems positive, with earnings growing by a robust 12.27%. This growth seems to continue into the following year with rates arriving at double digit 34.05% compared to today’s earnings, and finally hitting US$182.27M by 2021.
While it’s informative knowing the rate of growth year by year relative to today’s value, it may be more beneficial analyzing the rate at which the earnings are growing on average every year. The advantage of this method is that we can get a bigger 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 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 10.35%. This means, we can expect CubeSmart will grow its earnings by 10.35% every year for the next few years.
For CubeSmart, I’ve compiled three important aspects 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 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.
- 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!
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.