What Do Analysts Think About Clinuvel Pharmaceuticals Limited's (ASX:CUV) Future?
Clinuvel Pharmaceuticals Limited's (ASX:CUV) most recent earnings announcement in August 2019 confirmed that the business benefited from a strong tailwind, eventuating to a double-digit earnings growth of 37%. Below, I've laid out key numbers on how market analysts perceive Clinuvel Pharmaceuticals's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Check out our latest analysis for Clinuvel Pharmaceuticals
Analysts' outlook for next year seems pessimistic, with earnings declining by a double-digit -33%. In the next couple of years, earnings should continue to be below today's level, with a decline of -18% in 2021, eventually reaching AU$15m in 2022.
Although it’s useful to be aware of the growth year by year relative to today’s figure, it may be more valuable evaluating the rate at which the company is growing every year, on average. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of Clinuvel Pharmaceuticals's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've inserted 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 12%. This means, we can assume Clinuvel Pharmaceuticals will grow its earnings by 12% every year for the next couple of years.
Next Steps:
For Clinuvel Pharmaceuticals, I've compiled three pertinent 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 CUV 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 CUV is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CUV? 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 editorial-team@simplywallst.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.
