How Do Analysts See Innoviva Inc (NASDAQ:INVA) Performing In The Years Ahead?
The latest earnings release Innoviva Inc’s (NASDAQ:INVA) announced in December 2017 signalled that the business experienced a major tailwind, more than doubling its earnings from the prior year. Investors may find it useful to understand how market analysts perceive Innoviva’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. See our latest analysis for Innoviva
Market analysts’ consensus outlook for next year seems optimistic, with earnings expanding by a significant 98.85%. Earnings are predicted to shoot up to around US$318.35M in the following year before plateauing, heading into 2021.
Although it’s useful to understand the growth each year relative to today’s value, it may be more beneficial to gauge the rate at which the business is rising or falling every year, on average. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Innoviva’s earnings trajectory over time, be more volatile. To calculate this rate, I put 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 21.00%. This means, we can presume Innoviva will grow its earnings by 21.00% every year for the next few years.
Next Steps:
For Innoviva, I’ve put together three key factors you should further research:
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 INVA 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 INVA is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of INVA? 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.
