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After Abraxas Petroleum Corporation's (NASDAQ:AXAS) recent earnings announcement in March 2019, analyst forecasts seem bearish, with profits predicted to drop by 3.2% next year. However, compared to its 5-year track record of the average earnings growth rate of -5.7%, this is still an improvement. Currently with a trailing-twelve-month profit of US$58m, the consensus growth rate suggests that earnings will drop to US$56m by 2020. Below is a brief commentary on the longer term outlook the market has for Abraxas Petroleum. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from Abraxas Petroleum in the longer term?
The longer term view from the 6 analysts covering AXAS is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of AXAS'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.
From the current net income level of US$58m and the final forecast of US$251m by 2022, the annual rate of growth for AXAS’s earnings is 36%. This leads to an EPS of $0.45 in the final year of projections relative to the current EPS of $0.35. With a current profit margin of 39%, this movement will result in a margin of 102% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Abraxas Petroleum, I've compiled three essential 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.
- Future Earnings: How does Abraxas Petroleum's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Abraxas Petroleum? 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.