In December 2017, Biohaven Pharmaceutical Holding Company Ltd (NYSE:BHVN) released its latest earnings announcement, which signalled that losses became smaller relative to the prrior year’s level as a result of recent tailwinds Below is my commentary, albeit very simple and high-level, on how market analysts view Biohaven Pharmaceutical Holding’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. See our latest analysis for Biohaven Pharmaceutical Holding
Analysts’ expectations for this coming year seems pessimistic, with earnings becoming even more negative, generating -US$164.42M in 2019. In the following year, earnings are expected to hover around the same level before dwindling to -US$184.81M in 2021.
While it is useful to understand the growth rate year by year relative to today’s value, it may be more insightful evaluating the rate at which the business is moving on average every year. The pro of this technique is that we can get a bigger picture of the direction of Biohaven Pharmaceutical Holding’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. 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 29.66%. This means, we can presume Biohaven Pharmaceutical Holding will grow its earnings by 29.66% every year for the next couple of years.
For Biohaven Pharmaceutical Holding, I’ve compiled three relevant 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.
- Valuation: What is BHVN 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 BHVN is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BHVN? 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.