In December 2018, Colony Capital, Inc. (NYSE:CLNY) released its latest earnings announcement, which revealed company earnings became less negative compared to the previous year’s level as a result of recent tailwinds Today I want to provide a brief commentary on how market analysts perceive Colony Capital’s earnings growth trajectory over the next couple of 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.
Analysts’ outlook for the upcoming year seems buoyant, with earnings becoming less negative, generating -US$231.4m in 2020. However, this earnings level of -US$231.4m is expected to stay relatively stable over the next three years.
While it is informative knowing the growth year by year relative to today’s value, it may be more beneficial to analyze the rate at which the business is rising or falling every year, on average. The pro of this method is that we can get a better picture of the direction of Colony Capital’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute 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 46%. This means, we can expect Colony Capital will grow its earnings by 46% every year for the next couple of years.
For Colony Capital, I’ve put together three fundamental factors you should look at:
- 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 CLNY 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 CLNY is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CLNY? 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 email@example.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.