Cinemark Holdings, Inc.’s (NYSE:CNK) latest earnings update in December 2018 confirmed that the company endured a substantial headwind with earnings declining by -19%. Below, I’ve laid out key numbers on how market analysts perceive Cinemark Holdings’s earnings growth outlook over the next couple of years and whether the future looks brighter. 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.
Analysts’ outlook for next year seems buoyant, with earnings rising by a robust 25%. This growth seems to continue into the following year with rates arriving at double digit 32% compared to today’s earnings, and finally hitting US$311m by 2022.
Even though it’s informative knowing the growth rate year by year relative to today’s value, it may be more valuable to estimate the rate at which the company is moving every year, on average. The pro of this approach is that we can get a better picture of the direction of Cinemark Holdings’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 inserted 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 12%. This means, we can presume Cinemark Holdings will grow its earnings by 12% every year for the next few years.
For Cinemark Holdings, I’ve compiled three pertinent 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 CNK 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 CNK is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CNK? 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 firstname.lastname@example.org. 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.