The latest earnings announcement Clovis Oncology, Inc. (NASDAQ:CLVS) released in December 2018 showed company earnings became less negative compared to the previous year's level as a result of recent tailwinds Below, I've presented key growth figures on how market analysts predict Clovis Oncology's earnings growth outlook over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Analysts' expectations for the upcoming year seems relatively unexciting, with earnings continuing to flop around in the negative territory, generating -US$386.5m in 2020. Additionally, earnings are expected to fall further in the following year, falling to -US$369.7m in 2021 and -US$268.4m in 2022.
While it is informative understanding the growth each year relative to today’s figure, it may be more insightful evaluating the rate at which the company is growing every year, on average. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of Clovis Oncology's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 26%. This means, we can anticipate Clovis Oncology will grow its earnings by 26% every year for the next few years.
For Clovis Oncology, there are three essential aspects 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.
- Future Earnings: How does CLVS'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 CLVS? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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