Yahoo Finance CMS Energy Corporation (NYSE:CMS): What We Can Expect From This Growth Stock
In June 2018, CMS Energy Corporation (NYSE:CMS) released its earnings update. Generally, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 25% in the upcoming year relative to the past 5-year average growth rate of 3.7%. With trailing-twelve-month net income at current levels of US$549m, we should see this rise to US$687m in 2019. Below is a brief commentary around CMS Energy’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
See our latest analysis for CMS Energy
Exciting times ahead?
The longer term view from the 12 analysts covering CMS is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of CMS’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 8.2% based on the most recent earnings level of US$460m to the final forecast of US$667m by 2021. This leads to an EPS of $2.77 in the final year of projections relative to the current EPS of $1.64. Growth in earnings appears to be a result of cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. With a current profit margin of 7.0%, this movement will result in a margin of 9.6% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For CMS Energy, there are three pertinent factors you should further examine:
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.
Management:Have insiders been ramping up their shares to take advantage of the market’s sentiment for CMS Energy’s future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CMS Energy? 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.
