C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW): Immense Growth Potential?

Looking at C.H. Robinson Worldwide, Inc.’s (NASDAQ:CHRW) earnings update in September 2018, analyst consensus outlook appear cautiously optimistic, as a 8.5% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 4.5%. By 2020, we can expect C.H. Robinson Worldwide’s bottom line to reach US$548m, a jump from the current trailing-twelve-month of US$505m. Below is a brief commentary on the longer term outlook the market has for C.H. Robinson Worldwide. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

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How will C.H. Robinson Worldwide perform in the near future?

The 18 analysts covering CHRW view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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 CHRW’s earnings growth over these next few years.

NasdaqGS:CHRW Future Profit January 22nd 19
NasdaqGS:CHRW Future Profit January 22nd 19

This results in an annual growth rate of 5.7% based on the most recent earnings level of US$505m to the final forecast of US$599m by 2022. EPS reaches $5.6 in the final year of forecast compared to the current $3.59 EPS today. In 2022, CHRW’s profit margin will have expanded from 3.4% to 3.5%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For C.H. Robinson Worldwide, I’ve compiled three essential factors you should look at:

  1. 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.
  2. Valuation: What is C.H. Robinson Worldwide 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 C.H. Robinson Worldwide is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of C.H. Robinson Worldwide? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.