As Cogent Communications Holdings, Inc. (NASDAQ:CCOI) released its earnings announcement on 30 June 2019, the consensus outlook from analysts appear fairly confident, with profits predicted to increase by 22% next year relative to the past 5-year average growth rate of 0.7%. Currently with trailing-twelve-month earnings of US$29m, we can expect this to reach US$35m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Cogent Communications Holdings in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
How is Cogent Communications Holdings going to perform in the near future?
The longer term expectations from the 14 analysts of CCOI is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of CCOI's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, CCOI's earnings should reach US$60m, from current levels of US$29m, resulting in an annual growth rate of 22%. This leads to an EPS of $1.37 in the final year of projections relative to the current EPS of $0.63. In 2022, CCOI's profit margin will have expanded from 5.6% to 9.9%.
Future outlook is only one aspect when you're building an investment case for a stock. For Cogent Communications Holdings, I've compiled three fundamental 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 Cogent Communications Holdings 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 Cogent Communications Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Cogent Communications Holdings? 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.