In August 2017, Cambria Automobiles plc (AIM:CAMB) announced its most recent earnings update, which revealed that the business faced a slight headwind with earnings falling from £9.3M to £9.2M, a change of -0.86%. Below, I’ve laid out key growth figures on how market analysts view Cambria Automobiles’s earnings growth outlook over the next couple of years and whether the future looks brighter. 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. View our latest analysis for Cambria Automobiles
Market analysts’ prospects for next year seems pessimistic, with earnings declining by a double-digit -18.30%. Beyond this, earnings are predicted to continue to be below today’s level, with a decline of -15.03% in 2019, eventually reaching £7.8M in 2020.
Even though it’s helpful to be aware of the growth rate year by year relative to today’s level, it may be more beneficial to gauge the rate at which the company is moving on average every year. The pro of this method is that we can get a bigger picture of the direction of Cambria Automobiles’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’ve inserted 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 -3.99%. This means, we can anticipate Cambria Automobiles will chip away at a rate of -3.99% every year for the next couple of years.
Next Steps:
For Cambria Automobiles, there are three relevant factors you should further examine:
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 CAMB 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 CAMB is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CAMB? 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 pass 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.