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In December 2018, Arbutus Biopharma Corporation (NASDAQ:ABUS) released its latest earnings announcement, which signalled company earnings became less negative compared to the previous year's level - great news for investors Investors may find it useful to understand how market analysts predict Arbutus Biopharma's earnings growth outlook over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts' outlook for the upcoming year seems relatively muted, with earnings continuing to flop around in the negative territory, generating -US$73.3m in 2020. Moreover, earnings are predicted to fall further in the following year, before bouncing back up again to -US$70.0m in 2022.
While it is informative knowing the growth rate year by year relative to today’s value, it may be more insightful evaluating the rate at which the company is rising or falling on average every year. The advantage of this technique is that it ignores near term flucuations and accounts for the overarching direction of Arbutus Biopharma's earnings trajectory over time, be more volatile. To calculate 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 8.6%. This means that, we can anticipate Arbutus Biopharma will grow its earnings by 8.6% every year for the next couple of years.
For Arbutus Biopharma, I've compiled three key 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.
- Future Earnings: How does ABUS's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ABUS? 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 firstname.lastname@example.org. 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.