Ardelyx Inc (NASDAQ:ARDX): Is It A Good Long Term Opportunity?
The most recent earnings release Ardelyx Inc’s (NASDAQ:ARDX) announced in September 2017 suggested that losses became smaller relative to the prrior year’s level as a result of recent tailwinds Investors may find it useful to understand how market analysts predict Ardelyx’s earnings growth trajectory 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. See our latest analysis for Ardelyx
Analysts’ expectations for next year seems positive, with earnings becoming less negative, arriving at $-84.6M in 2019. In the following year, earnings should stay relatively stable before expanding to $-24.1M in 2021.
Even though it’s useful to understand the rate of growth each year relative to today’s level, it may be more beneficial determining the rate at which the business is moving every year, on average. The benefit of this approach is that we can get a bigger picture of the direction of Ardelyx’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To calculate this rate, I’ve appended 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 45.03%. This means, we can presume Ardelyx will grow its earnings by 45.03% every year for the next few years.
Next Steps:
For Ardelyx, I’ve compiled three important aspects you should look at:
1. 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.
2. Management:Have insiders been ramping up their shares to take advantage of the market’s sentiment for ARDX’s future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ARDX? 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.
