The latest earnings update Aralez Pharmaceuticals Inc’s (TSX:ARZ) released in December 2017 suggested company earnings became less negative compared to the previous year’s level as a result of recent tailwinds Below, I’ve presented key growth figures on how market analysts view Aralez Pharmaceuticals’s earnings growth outlook over the next few 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. Check out our latest analysis for Aralez Pharmaceuticals
Market analysts’ consensus outlook for next year seems buoyant, with earnings becoming less negative, arriving at -US$39.75M in 2019. In addition, earnings are expected to continue its upward direction, arriving at -US$18.23M in 2020, before plateauing to similar levels in 2021.
While it’s informative knowing the growth year by year relative to today’s level, it may be more beneficial gauging the rate at which the earnings are 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 Aralez 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 76.17%. This means, we can anticipate Aralez Pharmaceuticals will grow its earnings by 76.17% every year for the next few years.
For Aralez Pharmaceuticals, I’ve compiled three key aspects 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.
- Valuation: What is ARZ 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 ARZ is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ARZ? 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.