What Should We Expect From Colfax Corporation’s (NYSE:CFX) Earnings Over The Next Few Years?
In December 2018, Colfax Corporation (NYSE:CFX) released its most recent earnings announcement, which indicated that the business turned profitable again after experiencing negative earnings in the last financial year. Below, I’ve laid out key growth figures on how market analysts perceive Colfax’s earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Colfax
Market analysts’ consensus outlook for the coming year seems optimistic, with earnings climbing by a robust 22%. This growth seems to continue into the following year with rates reaching double digit 78% compared to today’s earnings, and finally hitting US$355m by 2022.
Even though it’s helpful to be aware of the rate of growth year by year relative to today’s value, it may be more insightful to estimate the rate at which the company is rising or falling on average every year. The benefit of this method is that we can get a bigger picture of the direction of Colfax’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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 21%. This means, we can assume Colfax will grow its earnings by 21% every year for the next few years.
Next Steps:
For Colfax, I’ve compiled three relevant factors 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 CFX 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 CFX is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CFX? 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.
