In December 2017, Aurinia Pharmaceuticals Inc (NASDAQ:AUPH) announced its most recent earnings update, which indicated that losses became smaller relative to the prrior year’s level as a result of recent tailwinds Below is a brief commentary on my key takeaways on how market analysts predict Aurinia Pharmaceuticals’s earnings growth trajectory over the next couple of 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. View our latest analysis for Aurinia Pharmaceuticals
Analysts’ outlook for this coming year seems optimistic, with earnings becoming less negative, reaching -US$59.22M in 2019. However, earnings are predicted to fall off in the following year, before bouncing back up again to -US$10.11M in 2021.
While it’s useful to understand the growth year by year relative to today’s level, it may be more insightful gauging the rate at which the company is growing on average every year. The benefit of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Aurinia Pharmaceuticals’s earnings trajectory over time, fluctuate up and down. To calculate this rate, I’ve inserted 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 55.40%. This means that, we can anticipate Aurinia Pharmaceuticals will grow its earnings by 55.40% every year for the next couple of years.
For Aurinia Pharmaceuticals, I’ve compiled three important 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 AUPH 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 AUPH is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AUPH? 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.