MasTec, Inc. (NYSE:MTZ): Will The Growth Last?
The latest earnings release MasTec, Inc.’s (NYSE:MTZ) announced in December 2018 showed that the business faced a immense headwind with earnings deteriorating by -25%. Below, I’ve presented key growth figures on how market analysts predict MasTec’s earnings growth trajectory over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for MasTec
Market analysts’ consensus outlook for the upcoming year seems optimistic, with earnings rising by a robust 24%. This growth seems to continue into the following year with rates arriving at double digit 40% compared to today’s earnings, and finally hitting US$380m by 2022.
Although it is informative knowing the rate of growth each year relative to today’s level, it may be more insightful to gauge the rate at which the earnings are rising or falling on average every year. The benefit of this approach is that we can get a bigger picture of the direction of MasTec’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 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 14%. This means that, we can anticipate MasTec will grow its earnings by 14% every year for the next couple of years.
Next Steps:
For MasTec, there are three essential aspects you should further research:
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 MTZ 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 MTZ is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MTZ? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.
