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The most recent earnings announcement C.H. Robinson Worldwide, Inc.’s (NASDAQ:CHRW) released in December 2018 suggested that the company benefited from a robust tailwind, leading to a double-digit earnings growth of 32%. Today I want to provide a brief commentary on how market analysts predict C.H. Robinson Worldwide’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Analysts’ outlook for the coming year seems rather subdued, with earnings increasing by a single digit 5.3%. The growth outlook in the following year seems much more positive with rates generating double digit 11% compared to today’s earnings, and finally hitting US$769m by 2022.
Even though it’s useful to be aware of the growth each year relative to today’s figure, it may be more beneficial determining the rate at which the company is rising or falling every year, on average. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of C.H. Robinson Worldwide’s earnings trajectory over time, which may be more relevant for long term investors. To calculate 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 4.9%. This means that, we can assume C.H. Robinson Worldwide will grow its earnings by 4.9% every year for the next couple of years.
For C.H. Robinson Worldwide, I’ve compiled 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 CHRW 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 CHRW is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CHRW? 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 firstname.lastname@example.org.