What Do Analysts Think About Cleanaway Waste Management Limited's (ASX:CWY) Growth?

Simply Wall St

In August 2019, Cleanaway Waste Management Limited (ASX:CWY) released its most recent earnings announcement, which revealed that the business experienced a strong tailwind, eventuating to a double-digit earnings growth of 19%. Below, I've presented key growth figures on how market analysts view Cleanaway Waste Management's earnings growth outlook over the next few years and whether the future looks even brighter than the past. 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.

See our latest analysis for Cleanaway Waste Management

Analysts' expectations for the upcoming year seems positive, with earnings expanding by a robust 18%. This growth seems to continue into the following year with rates reaching double digit 41% compared to today’s earnings, and finally hitting AU$192m by 2022.

ASX:CWY Past and Future Earnings, August 19th 2019

Even though it’s informative knowing the rate of growth year by year relative to today’s level, it may be more beneficial evaluating the rate at which the business is moving on average every year. The pro of this technique is that we can get a better picture of the direction of Cleanaway Waste Management'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 appended 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 that, we can presume Cleanaway Waste Management will grow its earnings by 12% every year for the next couple of years.

Next Steps:

For Cleanaway Waste Management, I've put together three important aspects you should further research:

  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 CWY 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 CWY is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CWY? 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 editorial-team@simplywallst.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.