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The latest earnings release MEDNAX, Inc.'s (NYSE:MD) announced in December 2018 showed that the business faced a immense headwind with earnings deteriorating by -16%. Below, I've laid out key numbers on how market analysts perceive MEDNAX's earnings growth outlook over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Market analysts' consensus outlook for next year seems pessimistic, with earnings falling by a double-digit -12%. In the following year, earnings begin to improve, but face another reduce in 2022 with earnings reaching US$256m.
While it’s useful to understand the rate of growth each year relative to today’s value, it may be more beneficial analyzing the rate at which the company is moving every year, on average. The pro of this method is that we can get a bigger picture of the direction of MEDNAX's earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To calculate this rate, I've inserted 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 -1.0%. This means that, we can anticipate MEDNAX will chip away at a rate of -1.0% every year for the next few years.
For MEDNAX, I've compiled three essential aspects 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.
- Valuation: What is MD 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 MD is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MD? 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 firstname.lastname@example.org. 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.