Conformis, Inc.’s (NASDAQ:CFMS) announced its latest earnings update in December 2018, which signalled that losses became smaller relative to the prior year’s level as a result of recent tailwinds Below, I’ve presented key growth figures on how market analysts view Conformis’s earnings growth outlook over the next few 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 buoyant, with earnings becoming less negative, arriving at -US$28.0m in 2020. However, earnings are predicted to fall off in the following year, falling to -US$23.0m in 2021 and -US$14.5m in 2022.
Although it’s helpful to understand the growth rate each year relative to today’s figure, it may be more valuable to analyze the rate at which the company is moving on average every year. The advantage of this approach is that it ignores near term flucuations and accounts for the overarching direction of Conformis’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 34%. This means that, we can assume Conformis will grow its earnings by 34% every year for the next couple of years.
For Conformis, there are three essential factors 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.
- Management:Have insiders been ramping up their shares to take advantage of the market’s sentiment for CFMS’s future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CFMS? 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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If you spot an error that warrants correction, please contact the editor at email@example.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.