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Based on CoreSite Realty Corporation’s (NYSE:COR) earnings update in March 2019, analyst forecasts seem fairly subdued, with profits predicted to rise by 8.6% next year relative to the higher past 5-year average growth rate of 36%. Presently, with latest-twelve-month earnings at US$78m, we should see this growing to US$85m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for CoreSite Realty in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Can we expect CoreSite Realty to keep growing?
Over the next three years, it seems the consensus view of the 16 analysts covering COR is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of COR’s earnings growth over these next few years.
From the current net income level of US$78m and the final forecast of US$97m by 2022, the annual rate of growth for COR’s earnings is 7.4%. This leads to an EPS of $2.56 in the final year of projections relative to the current EPS of $2.23. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 14% to 13% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For CoreSite Realty, I’ve put together three key aspects you should further examine:
- 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 CoreSite Realty 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 CoreSite Realty is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CoreSite Realty? 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.